Australian dollar (AUD) plunges amid shock labour market slowdown
The Australian dollar (AUD) faced heavy selling pressure yesterday after data showed that unemployment in April surged to its highest levels since November 2021.
The ‘Aussie’ fell as the startling slowdown in Australia’s labour market prompted investors to rethink their expectations for future interest rate hikes from the Reserve Bank of Australia (RBA).
AUD data is in short supply today, potentially leaving the focus on the dismal jobs data and exposing the Australian dollar to additional losses.
New Zealand dollar (NZD) slides in risk-off trade
The New Zealand dollar (NZD) also retreated on Thursday as a cautious market mood saw investors shun the ‘kiwi’ in favour of safe-haven assets.
Looking ahead, the publication of New Zealand’s latest retail sales data could act as a headwind for NZD this morning, if it reports a slowdown in sales growth in the first quarter of the year.
Pound (GBP) undermined by contraction in UK services sector
The pound (GBP) was subdued through yesterday’s session after the UK’s latest PMIs reported the vital services sector contracted in May for the first time in a year.
The shock decline fed into speculation that the Bank of England (BoE) might hold off a little longer before tightening monetary policy again.
Expect the pound to remain on the defensive today if the UK’s latest retail sales figures report that consumer spending slumped in April as forecast.
Euro (EUR) slips as Eurozone outlook darkens
The euro (EUR) ticked lower on Thursday as the Eurozone’s latest PMIs showed the recent downturn in the bloc’s private sector deepened this month.
Adding to the pressure on the single currency were the latest economic forecasts from the European Commission, as it revised down its growth projections for the Eurozone to 0.9% in 2026.
Coming up, the euro risks falling further if Germany’s latest IFO business climate index reports morale in the Eurozone’s largest economy continued to deteriorate this month.
US dollar (USD) firms amid market caution
The US dollar (USD) gained ground against most of its peers yesterday as a cautious market mood saw investors favour the safe-haven currency.
USD demand was also supported by the latest US S&P PMIs, which reported the US private sector continued to expand this month, thanks to a surprise acceleration of growth in manufacturing.
In the absence of any impactful US economic indicators, the US dollar may continue to be influenced primarily by market sentiment, potentially extending its gains if the mood remains broadly downbeat.
Canadian dollar (CAD) muted despite rising oil prices
The Canadian dollar (CAD) struggled to attract support on Thursday, with the currency seemingly unable to benefit from its correlation with oil prices.
Canada will also publish its latest retail sales data later today, with April’s figures potentially lifting the ‘loonie’ if they point to continued resilience in consumer spending.
Data Releases
08:45 NZD Retail Sales (Q1)
16:00 GBP Retail Sales (Apr)
18:00 EUR German IFO Business Climate Index (May)
22:30 CAD Retail Sales (Apr)