Australian dollar (AUD) slips as inflation misses forecasts
The Australian dollar (AUD) fell to multi-day lows yesterday as worries about a prolonged blockade in the Strait of Hormuz weighed on risk sentiment.
Australia’s latest inflation figures failed to provide AUD with support. Despite showing that inflation jumped in March, the data missed forecasts.
Market-moving Australian data is in short supply today, likely leaving AUD to trade on market risk appetite. Geopolitical uncertainty could therefore weigh on the ‘Aussie’.
New Zealand dollar (NZD) slides following RBNZ comments
The New Zealand dollar (NZD) also tumbled yesterday as Reserve Bank of New Zealand (RBNZ) Governor Anna Breman struck a less hawkish tone than expected.
The ‘kiwi’ could face additional pressure today, as New Zealand’s business confidence index for April is expected to have fallen to its lowest level since June 2024.
Pound (GBP) subdued as borrowing costs climb
The pound (GBP) struggled against its stronger rivals yesterday as UK government borrowing costs continued to creep higher, amid worries the Middle East crisis could drag on.
Meanwhile, Sterling’s increasingly risk-sensitive status put it on the back foot against its safer rivals, although it did strengthen against riskier currencies, such as the ‘Aussie’ and the ‘kiwi’.
GBP investors are likely to be laser-focused on the Bank of England (BoE) decision today. No change to policy is expected, but the bank’s forward guidance could drive movement in the pound.
Euro (EUR) unsure amid mixed factors
The euro (EUR) was uncertain yesterday as various factors pulled on the common currency.
A deterioration in Eurozone economic sentiment pressured EUR, as did the currency’s negative correlation with the rising US dollar (USD). However, a risk-off mood lent the euro support and the looming European Central Bank (ECB) decision limited movement.
Today is a big session for the euro, with the Eurozone’s latest GDP and inflation figures due to be published ahead of the ECB decision. Ultimately, EUR could attract support if the central bank signals that rate hikes are likely over the coming months.
US dollar (USD) buoyed by risk-off mood
The US dollar rose yesterday as a risk-off mood gripped markets. Investors were particularly unnerved by the prospect of an extended US blockade of the Strait of Hormuz.
The Federal Reserve’s interest rate decision also lent USD support, as the central bank left rates unchanged and indicated that cuts are unlikely while the US-Iran war continues.
Looking ahead, the preliminary estimate for US GDP growth in the first quarter of 2026 is scheduled for release later today. A forecast acceleration in growth could see the ‘greenback’ strengthen.
Canadian dollar (CAD) firms as oil prices climb
The crude-linked Canadian dollar (CAD) ticked higher yesterday amid rising oil prices. Meanwhile, the Bank of Canada’s (BoC) rate decision caused a small wobble in CAD exchange rates, despite the bank leaving policy untouched as expected.
Attention turns to Canada’s latest GDP figures today. Could a contraction in growth in March see the ‘loonie’ stumble?
Data releases
11:00 NZD ANZ Business Confidence (Apr)
19:00 EUR GDP Growth Rate (Q1)
19:00 EUR Inflation Rate (Apr)
21:00 GBP BoE Interest Rate Decision
22:15 EUR ECB Interest Rate Decision
22:30 CAD GDP (Mar)
22:30 USD GDP Growth Rate (Q1)