Australian dollar (AUD) wobbles as markets digest RBA minutes
The Australian dollar (AUD) fluctuated yesterday as markets digested the Reserve Bank of Australia’s (RBA) latest policy meeting minutes.
While the bank sees the potential need for interest rate hikes in the future, some policymakers were wary of tightening policy too quickly due to uncertainty around economic growth.
Looking ahead, market risk appetite could drive AUD movement today. If the conflict in the Middle East fuels risk aversion, the ‘Aussie’ may weaken.
New Zealand dollar (NZD) dips as business confidence collapses
The New Zealand dollar (NZD) declined yesterday after new data showed that New Zealand business confidence plunged to a 20-month low in March.
Risk sentiment could also be the key catalyst for NZD exchange rates today, with the ‘kiwi’ potentially stumbling if the tone is cautious.
Pound (GBP) uncertain following GDP figures
The pound (GBP) traded without a clear trajectory yesterday, although it managed to find limited success against weaker rivals following the UK’s latest GDP figures.
Although the finalised data confirmed the UK economy barely expanded in the fourth quarter, annual growth was revised slightly higher, from 1.3% to 1.4%.
The UK’s final manufacturing PMI for March may mute GBP today, if it contains confirmation of a slowdown in UK factory activity.
Euro (EUR) mixed despite jump in inflation
The euro (EUR) was also uncertain yesterday, after the Eurozone’s preliminary consumer price index for March marginally missed forecasts.
Headline inflation jumped from 1.9% to 2.5%. Although a sizeable jump, it was shy of the 2.6% forecast, with uncertainty over a European Central Bank (ECB) interest rate rise in April seeing EUR move without direction.
Today, the Eurozone’s final manufacturing PMI is in focus. Any deviation from the preliminary reading could influence EUR.
US dollar (USD) weakens as investors bank profits
The US dollar (USD) fluctuated yesterday, eventually trending lower, as USD appeared to suffer some profit-taking.
In addition, an improving market mood during the European and US trading hours dampened demand for the safe-haven ‘greenback’.
Turning to today, a lacklustre reading in the latest ADP employment change report could dent USD. However, the ‘greenback’ may attract support later on, if US retail sales rebounded in February.
Canadian dollar (CAD) tumbles following drop in oil prices
The crude-linked Canadian dollar (CAD) plunged yesterday, as a sharp drop in oil prices dragged the currency lower.
Canada’s latest manufacturing PMI could weigh on CAD exchange rates today. Markets expect to see a contraction in factory activity in March.
Data releases
08:00 AUD Ai Group Industry Index (Mar)
18:00 EUR Manufacturing PMI (Mar)
18:30 GBP Manufacturing PMI (Mar)
22:15 USD ADP Employment Change (Mar)
22:30 USD Retail Sales (Feb)
23:30 CAD Manufacturing PMI (Mar)