Australian dollar (AUD) buoyed by RBA hike bets
The Australian dollar (AUD) rose yesterday amid growing bets on further interest rate hikes from the Reserve Bank of Australia (RBA).
This came following the announcement of Australia’s latest budget, which analysts believe could complicate the RBA’s efforts to tame inflation.
Today, a forecast jump in Australian consumer inflation expectations could support the ‘Aussie’, if it’s seen as reinforcing bets on multiple RBA hikes this year.
New Zealand dollar (NZD) falls amid gloomy economic outlook
The New Zealand dollar (NZD) slumped yesterday as the Reserve Bank of New Zealand’s (RBNZ) latest survey of expectations pointed to a pessimistic outlook for the New Zealand economy.
Risk sentiment could determine NZD’s direction today, with the ‘kiwi’ poised to fall if geopolitical fears cast a shadow over markets.
Pound (GBP) rocked by ongoing uncertainty
The pound (GBP) continued to face headwinds yesterday amid persistent political uncertainty in the UK.
Prime Minister Keir Starmer had appeared to fend off an immediate leadership challenge. However, rumours that Health Secretary Wes Streeting was preparing to resign and trigger a contest over the coming days kept GBP on the back foot.
While the UK’s GDP figures could support the pound today if they print as expected, political jitters could drown out the positive data. If Streeting resigns and launches a leadership challenge, Sterling is likely to slide.
Euro (EUR) remains pressured by USD strength
The euro (EUR) weakened yesterday as the common currency suffered from its strong inverse trading relationship with the rising US dollar (USD).
Meanwhile, lacklustre Eurozone economic data left the euro lacking support.
A speech from European Central Bank (ECB) President Christine Lagarde could impact EUR today. Any signals that a rate hike is on the way could lift the common currency.
US dollar (USD) firms amid Fed expectations
The US dollar extended its upside yesterday as the latest producer price index showed a surge in factory gate inflation in April.
This supported bets that the Federal Reserve could potentially raise interest rates by the end of the year.
Turning to today, the latest US retail sales figures are in focus. Could a slowdown in sales dampen USD demand?
Canadian dollar (CAD) supported by rising oil prices
The crude-linked Canadian dollar (CAD) rose against its weaker rivals yesterday as climbing oil prices underpinned the currency.
With Canadian data still absent from the calendar today, crude prices could remain the key driver of CAD movement, potentially offering the ‘loonie’ support if prices rise again.
Data releases
11:00 AUD Consumer Inflation Expectations (May)
16:00 GBP GDP Growth Rate (Q1)
19:15 EUR ECB President Lagarde Speech
22:30 USD Retail Sales (Apr)
22:30 USD Initial Jobless Claims (09/May)