Australian dollar (AUD) slips in risk-off trade
The Australian dollar (AUD) got off to a poor start this week, stumbling through Monday’s session amid renewed geopolitical uncertainty.
Investors largely shunned risk-sensitive assets as flaring tensions between the US and Iran raised fresh concerns of a protracted conflict in the Middle East.
In the absence of any notable domestic data, movement in the ‘Aussie’ is likely to continue to track market risk dynamics through today’s session.
New Zealand dollar (NZD) losses tempered by rising exports
The New Zealand dollar (NZD) was also buffeted by risk-off flows on Monday, but was able to moderate its losses thanks to a larger-than-expected uplift in domestic exports last month.
New Zealand’s latest consumer price index could help underpin the ‘kiwi’ this morning if a robust first-quarter inflation reading strengthens Reserve Bank of New Zealand (RBNZ) interest rate hike bets.
Pound (GBP) subdued as UK consumer sentiment plunges
The pound (GBP) was muted yesterday amid signs of a worrying drop in UK consumer morale.
S&P Global’s consumer confidence index for the UK plummeted to a 33-month low in April as households grew increasingly concerned about inflation and the jobs market.
The UK’s latest jobs report may sap Sterling sentiment today if it confirms unemployment held at a five-year high, while wage growth simultaneously slowed in February.
Euro (EUR) flat despite jump in German PPI
The euro (EUR) struggled to attract any meaningful support on Monday, despite signs of rising inflationary pressures in Germany.
Germany’s latest producer price index saw factory input prices soar 2.5% in March, stoking expectations that inflation in the Eurozone’s largest economy will continue to accelerate as this increase is passed on to consumers.
Coming up, Germany’s latest ZEW economic sentiment index could apply pressure to the euro today if morale continued to deteriorate this month.
US dollar (USD) firms as US seizes Iranian ship
The US dollar (USD) opened this week’s session on strong footing amid fears the ceasefire between the US and Iran is at risk of collapse.
This follows the US seizure of an Iranian-flagged cargo ship attempting to navigate the Strait of Hormuz, with Tehran vowing to retaliate and ruling out further talks with the US.
In addition to Middle East uncertainty, the US dollar may also be supported by the latest US retail sales figures today, which are forecast to report a sharp acceleration in sales growth last month.
Canadian dollar (CAD) flat as inflation undershoots expectations
The Canadian dollar (CAD) was rangebound on Monday as Canada’s consumer price index reported domestic inflation accelerated at a slightly slower-than-expected pace last month.
Looking ahead, the focus for CAD investors today is likely to return to oil-price dynamics, with the ‘loonie’ poised to firm if crude prices continue to climb.
Data releases
08:45 NZD Inflation Rate (Q1)
16:00 GBP Unemployment Rate (Feb)
16:00 GBP Wage Growth (Feb)
19:00 EUR German ZEW Economic Sentiment Index (Apr)
22:30 USD Retail Sales (Mar)