Australian dollar (AUD) rallies in risk-positive trade
The Australian dollar (AUD) was bolstered by positive risk flows yesterday, as markets remained optimistic about a US-Iran peace deal.
However, capping AUD’s upside potential were Australia’s latest trade figures, which reported a sizable drop in exports in March.
Turning to today’s session, the ‘Aussie’ may build on its recent gains if market risk appetite continues to improve.
New Zealand dollar (NZD) strengthens amid upbeat mood
The New Zealand dollar (NZD) also firmed on Thursday amid the positive market mood.
In the absence of any notable domestic releases, movement in the ‘kiwi’ is likely to remain tied to market risk sentiment through today’s session.
Pound (GBP) subdued amid UK local elections
The pound (GBP) struggled to attract any meaningful support yesterday, with investors erring on the side of caution as the UK went to the polls in closely watched local elections.
GBP investors were particularly concerned about the potential impact the election could have on UK bond markets, as a wipeout for Labour could prompt a leadership challenge against Keir Starmer.
Looking ahead, the pound may face some volatility today as the local election results start to trickle in.
Euro (EUR) flat following upbeat German factory data
The euro (EUR) was mostly rangebound yesterday as German industrial data and European Central Bank (ECB) policy expectations pulled the single currency in opposite directions.
While German factory orders soared in March amid stockpiling caused by the crisis in the Middle East, hopes for a peaceful solution simultaneously led EUR investors to trim some of their more hawkish bets for ECB rate hikes this year.
Coming up, Germany’s latest industrial production figures, as well as a speech by ECB President Christine Lagarde, will be in focus for EUR investors today.
US dollar (USD) extends losses on US-Iran peace optimism
The recent US dollar selling bias remained in place yesterday as investors continued to shun safe-haven assets amid hopes for peace in the Middle East.
Optimism continued to build on Thursday as US President Donald Trump suggested a deal is ‘very possible as Tehran considered a US proposal to end the conflict.
The latest US non-farm payroll report could extend the USD selloff today, if an expected slowdown in the US labour market last month tempers some investors’ more hawkish Federal Reserve policy expectations.
Canadian dollar (CAD) dented by softer oil prices
The commodity-linked Canadian dollar (CAD) ticked lower on Thursday as global oil prices fell back below $100 a barrel.
Canada’s latest employment figures could provide some lift for the ‘loonie’ later today, if the labour market remained resilient through April.
Data Releases
16:00 EUR German Industrial Production (Mar)
17:00 EUR ECB President Lagarde Speech
22:30 CAD Unemployment Rate (Apr)
22:30 USD Non-Farm Payrolls (Apr)