Australian dollar (AUD) subdued amid risk-off mood
The Australian dollar (AUD) initially stumbled yesterday amid a risk-off market mood, although it managed to rebound against its weaker peers later in the session.
The rebound came as Australia’s latest business confidence index beat forecasts to unexpectedly rise in April, although the score remained negative at -24.
Turning to today, Australia’s consumer confidence index is the focus. Could a forecast improvement in May underpin AUD?
New Zealand dollar (NZD) wavers in cautious trade
The New Zealand dollar (NZD) also faced early pressure yesterday due to a cautious tone in markets, before recovering against many of its counterparts later on.
An expected cooling of domestic business inflation expectations may dampen NZD demand today. Elsewhere, risk appetite could continue to drive movement.
Pound (GBP) slides as Starmer’s future remains under threat
The pound (GBP) found itself on the back foot yesterday as a growing number of MPs called on Prime Minister Keir Starmer to resign.
Although GBP stabilised briefly after Starmer told his cabinet he would not step down, Sterling faced further losses as three ministers resigned from government in protest.
Political uncertainty may remain in focus for GBP investors today. Later in the session, a speech from Bank of England (BoE) policymaker Catherine Mann could affect GBP, with any hints of an interest rate hike potentially lending Sterling support.
Euro (EUR) falters amid stronger USD
The euro (EUR) came under pressure from its negative correlation with the US dollar (USD) yesterday, as the latter caught bids.
However, EUR was spared more notable losses thanks to better-than-expected German data. The country’s ZEW economic sentiment indicator unexpectedly improved in May.
Looking forward, a forecast slowdown in Eurozone industrial production in March could place modest pressure on EUR exchange rates today.
US dollar (USD) firms amid Fed rate hike bets
The US dollar rose yesterday, with the safe-haven currency initially buoyed by a risk-off market mood after President Donald Trump said the US-Iran ceasefire was on ‘massive life support’.
The ‘greenback’ continued to enjoy support later in the session thanks to the latest US consumer price index. With inflation rising from 3.3% to 3.8% in April, markets increased their bets on a Federal Reserve interest rate hike this year.
Today brings the release of the US producer price index for April. If we see a similar rise in factory gate inflation, USD could extend its upside.
Canadian dollar (CAD) ticks higher as oil prices rise
The crude-linked Canadian dollar (CAD) firmed yesterday as rising oil prices underpinned the currency.
Oil price dynamics are likely to remain the key catalyst for CAD movement today, with the ‘loonie’ poised to climb higher if crude remains elevated.
Data releases
11:30 AUD Westpac Consumer Confidence Index (May)
13:00 NZD Business Inflation Expectations (Q2)
19:00 EUR Industrial Production (Mar)
22:30 USD PPI (Apr)
00:00 GBP BoE Mann Speech