Australian dollar (AUD) tumbles following cooler inflation figures
The Australian dollar (AUD) fell sharply yesterday following the publication of Australia’s latest consumer price index.
The CPI showed headline inflation easing more than expected in April, dampening bets on further interest rate hikes from the Reserve Bank of Australia (RBA).
Today, the RBA will publish its latest economic bulletin. Any signals on the inflation outlook or wider economic conditions could influence rate expectations and potentially trigger fresh movement in AUD.
New Zealand dollar (NZD) jumps on RBNZ’s hawkish hold
The New Zealand dollar (NZD) surged yesterday after the Reserve Bank of New Zealand (RBNZ) held rates steady but strongly signalled that it would tighten policy soon.
Looking ahead, the New Zealand government will announce its 2026 budget later today. Investors will be watching for any policy measures that could influence inflationary pressures or the broader economic outlook, potentially injecting some volatility into NZD.
Pound (GBP) rudderless in absence of data
The pound (GBP) was mixed yesterday, as a lack of UK economic data left the currency adrift.
As a result, Sterling traded in a wide range against its peers.
Turning to today, UK data remains absent from the calendar. As a result, Sterling could trade without a clear directional bias once again.
Euro (EUR) underpinned by ECB bets
The euro (EUR) firmed yesterday, with the single currency being buoyed by European Central Bank (ECB) interest rate hike bets.
The ECB’s latest Financial Stability Review indicated that inflationary pressures are likely to lead to tighter monetary policy, reinforcing expectations that the bank will raise rates at least twice over the next year.
A further deterioration in Eurozone economic sentiment in May could pressure EUR today. However, any losses in the common currency may be limited if we see any hawkish signals from ECB
President Christine Lagarde or the bank’s latest policy meeting minutes.
US dollar (USD) muted amid uncertain market mood
The safe-haven US dollar (USD) lacked a clear direction yesterday amid an uncertain market mood.
Peace talks between the US and Iran kept risk appetite in check, with markets wary of being too optimistic while negotiations are ongoing.
Today the focus falls on the latest core PCE price index – the Federal Reserve’s preferred measure of inflation. Rising price pressures could reinforce Federal Reserve interest rate hike bets, thereby supporting USD.
Canadian dollar (CAD) dented by declining oil prices
The commodity-sensitive Canadian dollar (CAD) stumbled yesterday as oil prices dropped. Iranian state TV reported that if a peace deal can be agreed, commercial shipping through the Strait of
Hormuz would return to pre-war levels within one month.
Crude prices could continue to drive CAD exchange rates today. If optimism prevails, falling oil prices could drag the ‘loonie’ lower.
Data releases
11:30 AUD RBA Bulletin
12:00 NZD Budget 2026
17:20 EUR ECB President Lagarde Speech
19:00 EUR Economic Sentiment (May)
21:30 EUR ECB Monetary Policy Meeting Accounts
22:30 USD Core PCE Price Index (Apr)