Australian dollar (AUD) rebounds as USD demand falters
The Australian dollar (AUD) initially faltered on Friday amid a weakening of market risk appetite through the Asian trading session.
However, AUD exchange rates then moved higher during European trading hours as a pullback in the US dollar (USD) helped to revive risk appetite.
In the absence of any notable domestic data, expect movement in the ‘Aussie’ to remain closely tied to investor risk appetite at the start of this week.
New Zealand dollar (NZD) wobbles in mixed trade
Trade in the New Zealand dollar (NZD) was also choppy at the end of last week as a result of the fluctuating market mood.
NZD data is thin on the ground today, likely leaving the ‘kiwi’ to continue to track market risk dynamics through the session.
Pound (GBP) muted despite sharp rebound in retail sales
The pound (GBP) was subdued at the end of last week as markets digested the UK’s latest retail sales data.
While sales growth rebounded at a much faster-than-expected pace last month, the data showed this was underpinned primarily by the rise in motor fuel prices, with sales volumes excluding fuel proving much more modest.
The Confederation of British Industry (CBI) will publish its latest distributive trades index later today, with Sterling poised to fall if the contraction in the UK’s retail trade balance deepened this month.
Euro (EUR) shrugs off weak German confidence data
The euro (EUR) edged higher on Friday, underpinned by its inverse trading relationship with the US dollar.
This was enough to offset Germany’s latest IFO business climate index, which reported morale slump to a six-year low in April.
Notable Eurozone data is in short supply through the start of this week, which may leave the euro directionless today.
US dollar (USD) undermined by profit-taking
The US dollar (USD) ticked lower at the end of last week as it suffered from some profit-taking after climbing to a 10-day high earlier in the session.
However, the correction remained very modest amid the ongoing blockade of the Strait of Hormuz.
Looking ahead, events in the Middle East will likely continue to influence global risk appetite and demand for the US dollar at the start of this week.
Canadian dollar (CAD) muted as retail sales slow
The Canadian dollar (CAD) was subdued through Friday’s session, pressured by weaker-than-expected retail sales data.
Oil price dynamics are likely to dictate CAD demand through the start of this week, with the ‘loonie’ likely to firm if prices maintain an upward trajectory.
Data Releases
16:00 EUR German Consumer Confidence (May)
20:00 GBP CBI Distributive Trades (Apr)