Australian dollar (AUD) retreats amid Middle East uncertainty
The Australian dollar (AUD) stumbled out of the gates this week amid a fresh escalation of tensions in the Middle East.
This followed the collapse of peace talks between the US and Iran over the weekend, and the resulting spike in global energy prices.
Coming up, the ‘Aussie’ may remain on the defensive today if data shows the war has eroded domestic consumer and business confidence.
New Zealand dollar (NZD) slides on soft PMI data
The New Zealand dollar (NZD) also faltered on Monday, pressured by the risk-off mood and weak domestic PMI figures.
In the absence of any notable domestic data, the ‘kiwi’ is likely to remain tied to market risk dynamics through today’s session.
Pound (GBP) buoyed by EU alignment optimism
The pound (GBP) trended higher against most of its peers yesterday, supported by the prospect of closer UK alignment with the EU’s single market.
Proposed legislation would see the UK adopt new EU regulations without requiring a full parliamentary vote each time, with GBP investors hoping this will help ease friction with the UK’s closest trading partner.
GBP investors will look to comments from Bank of England (BoE) Governor Andrew Bailey for fresh impetus today, with Sterling potentially faltering if he pushes back on the more aggressive bets for UK interest rates this year.
Euro (EUR) stable as EU officials welcome Hungarian election result
The euro (EUR) was steady on Monday, amid cautious optimism in the EU following Victor Orban’s loss in Hungary’s general election.
Orban’s successor, Péter Magyar, has already signalled he will forge a closer relationship with the EU and end Hungary’s endless obstruction of key EU decisions.
In the absence of any notable Eurozone economic releases, movement in the euro is likely to be dictated by wider market movements today.
US dollar (USD) bolstered by collapse of US-Iran peace talks
The US dollar (USD) opened this week on strong footing, reversing the bulk of the losses it suffered at the end of last week.
The upswing in USD is driven by fresh safe-haven demand after US-Iran peace talks broke down over the weekend and President Donald Trump threatens to blockade the Strait of Hormuz.
Expect the US dollar to remain in demand today amid the ongoing uncertainty in the Middle East.
Canadian dollar (CAD) firms as oil prices rise
The Canadian dollar (CAD) ticked higher on Monday, as global oil prices rebounded above $100 a barrel.
The ‘loonie’ is likely to remain bid today if Middle East tensions continue to propel oil prices higher.
Data Releases
10:30 AUD Consumer Confidence (Apr)
11:30 AUD Business Confidence (Mar)
22:30 USD PPI (Mar)
02:00 GBP BoE Bailey Speech