Australian dollar (AUD) stumbles as sentiment sours
The Australian dollar (AUD) initially weakened yesterday as a souring market mood pressured the risk-sensitive currency.
However, AUD managed to recoup some losses against its weaker peers during European trade, with rising commodity prices potentially cushioning the ‘Aussie’.
Today, the spotlight falls on Australia’s latest inflation figures. Could a surge in price pressures last month boost Reserve Bank of Australia (RBA) interest rate hike bets and propel the Australian dollar higher?
New Zealand dollar (NZD) falls as risk appetite falters
The New Zealand dollar (NZD) fell yesterday as reports that US President Donald Trump was dissatisfied with Iran’s peace proposal soured the market mood.
Looking ahead, Reserve Bank of New Zealand (RBNZ) Governor Anna Breman is due to deliver a speech later this morning. If she signals that the bank may hike rates in the coming months, NZD could strengthen.
Pound (GBP) slips amid ongoing political anxiety
The pound (GBP) faced headwinds yesterday amid ongoing concerns about the Peter Mandelson scandal and the future of Prime Minister Keir Starmer as Labour leader.
With Parliament voting on whether Starmer should face an inquiry into allegations he misled MPs, political jitters saw UK borrowing costs approach highs not seen since the 2008 financial crisis.
UK data is thin on the ground today, and with the Bank of England (BoE) interest rate decision looming, Sterling may trade in a narrow range.
Euro (EUR) unsure amid inflation concerns and USD strength
The euro (EUR) was mixed yesterday, rising against its weaker peers but losing ground elsewhere.
The uncertain movement came as a sharp rise in Eurozone consumer inflation expectations boosted the euro, but a stronger US dollar (USD) dented the currency, due to EUR’s negative correlation with USD.
A forecast deterioration in Eurozone economic sentiment in April could pressure EUR today. However, a rise in German inflation could offset the downside.
US dollar (USD) firms amid fresh Middle East uncertainty
The US dollar rose yesterday as a shift to risk-off trade lifted demand for safe-haven currencies such as the ‘greenback’.
Renewed risk aversion came amid reports that Donald Trump is dissatisfied with Iran’s latest peace proposal, with the news puncturing the cautious optimism seen on Monday.
Turning to today, USD could be subdued as investors brace for the Federal Reserve’s policy announcement tomorrow morning.
Canadian dollar (CAD) slips as profit-taking sets in
The crude-linked Canadian dollar (CAD) saw a brief upside yesterday amid rising oil prices, touching multi-week highs against some peers before falling afoul of profit-taking.
CAD investors will focus firmly on the Bank of Canada’s (BoC) interest rate decision today. While no change to policy is expected, any hints at future rate hikes could underpin the ‘loonie’.
Data releases
11:30 AUD Inflation Rate (Mar)
11:30 NZD RBNZ Gov Breman Speech
19:00 EUR Economic Sentiment (Apr)
22:00 EUR German Inflation Rate (Apr)
23:45 CAD BoC Interest Rate Decision