Australian dollar (AUD) firms as mood improves
After initially trading sideways yesterday, the Australian dollar (AUD) managed to tick higher in the evening.
The rebound in the ‘Aussie’ came as market sentiment improved amid a pullback in global bond yields.
Australia’s latest PMI surveys could weigh on AUD today, if they report that activity in the private sector ground to a halt in May. However, signs of a steady Australian labour market could offset the downside.
New Zealand dollar (NZD) buoyed by risk-on mood
The New Zealand dollar (NZD) also gained ground yesterday as the increase in risk appetite lifted NZD demand.
Looking forward, risk appetite could be the primary catalyst for NZD movement through the remainder of the session. Any shifts in sentiment could infuse the ‘kiwi’ with volatility.
Pound (GBP) brushes off weaker inflation figures
The pound (GBP) edged up against its weaker peers yesterday, with GBP investors shrugging off a softer-than-forecast UK consumer price index.
While headline inflation eased from 3.3% to 2.8% in April, it did little to impact Bank of England (BoE) interest rate hike bets. Economists still expect UK inflation to rise through 2026.
Turning to today, the UK’s latest services PMI could drive GBP movement. An expected slowdown in activity could weigh on Sterling.
Euro (EUR) subdued amid upbeat trade
The euro (EUR) moved without a clear trajectory yesterday as fresh Eurozone data failed to provide a clear catalyst.
This saw the safer single currency trade on risk appetite, with EUR losing out to riskier rivals.
The Eurozone’s own PMI surveys will be the focus for EUR investors today. An ongoing contraction in private sector activity in the bloc may undermine the euro.
US dollar (USD) stumbles as risk appetite returns
The US dollar (USD) initially edged higher yesterday, with the currency benefitting from safe-haven flows.
However, USD retreated in the evening as market sentiment recovered. A slight pullback in Federal Reserve rate hike bets also undermined the American dollar.
Although less influential than the ISM releases, the latest US PMI results from S&P Global could impact USD today. Could weak private sector activity undermine the US dollar?
Canadian dollar (CAD) retreats in tandem with oil
The crude-linked Canadian dollar (CAD) trended lower yesterday as cooling oil prices dented the ‘loonie’.
Oil price movements may continue driving the Canadian dollar today, potentially leaving CAD exposed to volatility.
Data releases
08:45 NZD Balance of Trade (Apr)
09:00 AUD Composite PMI (May)
11:30 AUD Unemployment Rate (Apr)
18:00 EUR Composite PMI (May)
18:30 GBP Services PMI (May)
23:45 USD Composite PMI (May)