Australian dollar (AUD) pulls back amid Middle East tensions
The Australian dollar (AUD) initially softened yesterday, easing off recent highs, as renewed tensions in the Middle East dented demand for the risk-sensitive currency.
Fresh US strikes on Iran dampened recent optimism that the two sides could soon agree a deal to reopen the Strait of Hormuz. However, AUD recouped some losses as the mood improved in the evening.
Australia’s latest consumer price index could be the main catalyst for AUD movement today. Although headline inflation is forecast to have eased in April, an expected rise in the Reserve Bank of
Australia’s (RBA) trimmed mean CPI could support the ‘Aussie’.
New Zealand dollar (NZD) declines in risk-off trade
The New Zealand dollar (NZD) fell yesterday as risk aversion linked to the situation in the Middle East weighed on the ‘kiwi’.
The spotlight today falls on the Reserve Bank of New Zealand’s (RBNZ) policy announcement. With no change expected, investors will be focusing on the bank’s forward guidance. Any hints of future interest rate hikes could lift NZD.
Pound (GBP) retreats amid soft retail data
The pound (GBP) stumbled on Tuesday, with Sterling struggling to hold on to its recent gains despite better-than-forecast data from the Confederation of British Industry (CBI).
Although the CBI retail sales balance improved more than expected in May, it remained deep in negative territory at -46.
Looking forward, British data is in short supply today. As a result, movement in Sterling may be muted.
Euro (EUR) unclear in absence of data
A lack of Eurozone data saw the euro (EUR) trade without a clear direction yesterday.
Without a domestic catalyst to drive movement, the safer single currency found itself wavering amid the uncertain market mood.
Eurozone data remains thin on the ground during today’s session, which could leave the common currency to trade without a clear trajectory once again.
US dollar (USD) capped by improving mood
The US dollar (USD) initially attracted some support yesterday as fresh geopolitical jitters boosted the safe-haven currency’s appeal.
However, USD found its upside potential stifled as risk appetite improved in the evening. Despite the recent US strikes on Iran, markets were hopeful that ongoing peace negotiations could yield results.
Today brings the latest weekly ADP employment change figure along with a speech from Federal Reserve policymaker Lorie Logan. Could healthy employment data and hawkish comments underpin the US dollar?
Canadian dollar (CAD) unmoved as oil edges higher
A modest uptick in oil prices failed to lift the commodity-linked Canadian dollar (CAD) yesterday, as crude prices remained below last week’s levels.
With Canadian data absent from the calendar today, oil price movements could influence CAD today. If we see a steeper rise in prices, the ‘loonie’ may strengthen.
Data releases
11:30 AUD Inflation Rate (Apr)
12:00 NZD RBNZ Interest Rate Decision
18:00 USD Fed Logan Speech
22:15 USD ADP Employment Change Weekly