Australian dollar (AUD) subdued amid cautious trade
The Australian dollar (AUD) struggled to attract support yesterday as uncertainty in the Middle East dampened investor appetite for riskier assets, such as AUD.
Although reports emerged that both Iran and the US would hold a fresh round of ceasefire negotiations, the recent flare-up in tensions and hawkish rhetoric from both sides stifled risk sentiment.
Market risk appetite may continue to determine AUD’s direction today, with investors likely keeping a close eye on events in the Middle East.
New Zealand dollar (NZD) jumps on RBNZ rate hike bets
The New Zealand dollar (NZD) leapt yesterday as New Zealand’s first-quarter inflation figures exceeded expectations, boosting bets on a Reserve Bank of New Zealand (RBNZ) interest rate hike.
The ‘kiwi’ is also likely to track risk sentiment today. Expect to see NZD waver if uncertainty persists in the Middle East.
Pound (GBP) fluctuates following mixed jobs data
The pound (GBP) faced volatility yesterday as a mixed UK jobs report saw Sterling trade in a wide range.
Political jitters added to the choppy movement. The ongoing scandal around the appointment of Peter Mandelson as US ambassador continued to dominate UK headlines.
Today, GBP investors will be focusing on the UK’s latest consumer price index. A sharp rise in inflation in March could revive Bank of England (BoE) interest rate hike bets, thereby supporting Sterling.
Euro (EUR) dragged down by German data
The euro (EUR) slipped yesterday as troubling German data weighed heavily on the common currency.
Germany’s ZEW economic sentiment index fell to -17.2 in April, its worst reading since December 2022 and well below forecasts that it would only drop to -5.
Looking ahead, the Eurozone’s consumer confidence index for April is due out overnight. Another deterioration in morale could sap demand for EUR.
US dollar (USD) buoyed by Middle East uncertainty
The US dollar (USD) firmed yesterday as uncertainty around the US-Iran ceasefire and upcoming peace talks provided USD with safe-haven support.
The mood improved later in the session, trimming USD’s gains, although strong US retail sales in March helped keep the ‘greenback’ afloat.
With US data thin on the ground today, the ‘greenback’ could trade primarily on market risk appetite. Ongoing geopolitical uncertainty could see USD waver.
Canadian dollar (CAD) supported by oil prices
The crude-linked Canadian dollar (CAD) ticked higher against its weaker rivals yesterday as a slight rise in oil prices bolstered the ‘loonie’.
Oil price movements could continue to drive CAD today amid a lack of Canadian economic data. Events in the Middle East could lead to crude volatility.
Data releases
16:00 GBP Inflation Rate (Mar)
00:00 EUR Consumer Confidence (Apr)