Australian dollar (AUD) weakens in cautious trade
The Australian dollar (AUD) got off to a poor start this week as renewed Middle East uncertainty sapped market risk appetite.
Adding to the headwinds facing the ‘Aussie’ was China’s latest manufacturing PMI, which reported a slowdown in factory activity last month.
In the absence of any notable Australian data, movement in AUD exchange rates is likely to remain tied to market risk dynamics today.
New Zealand dollar (NZD) undermined by profit-taking
The New Zealand dollar (NZD) retreated through Monday’s session as the currency’s bullish run last week triggered some profit-taking amongst investors.
Looking ahead, the ‘kiwi’ may continue to face resistance today if a cautious mood continues to prevail.
Pound (GBP) buoyed by revised manufacturing PMI
The pound (GBP) found modest support yesterday, with the release of the UK’s latest manufacturing PMI.
May’s finalised index saw growth in the factory sector revised to its highest level in four years, although with the caveat that this momentum is likely to be temporary as firms front-loaded purchases to beat potential price rises due to the crisis in the Middle East.
GBP investors will look to a speech by Bank of England (BoE) policymaker Megan Greene for fresh impetus today. As one of the BoE’s more hawkish members, her remarks could help to underpin Sterling.
Euro (EUR) stumbles as German retail sales contract
The euro (EUR) trended lower on Monday after Germany’s latest retail sales figures showed that consumer spending in the Eurozone’s largest economy has shrunk for four consecutive months.
These losses were reinforced by a European Central Bank (ECB) survey showing that consumer inflation expectations remained flat in April.
Turning to today’s session, the euro has a chance to recoup these losses as an expected acceleration in Eurozone inflation last month is likely to reinforce bets for an ECB interest rate hike next week.
US dollar (USD) strengthens on impressive factory PMI
The US dollar (USD) accelerated through the start of this week’s session as last month’s ISM manufacturing PMI beat forecasts, with the US factory sector recording its strongest growth since May 2022.
This built on gains made earlier in the session as fresh military strikes in the Middle East over the weekend underpinned demand for safe-haven assets.
Coming up, the US dollar may maintain a positive trajectory today if US job openings continued to outpace expectations in April.
Canadian dollar (CAD) remains pressured by weak GDP data
The Canadian dollar (CAD) ticked lower on Monday as it continued to be pressured by data published last week that showed Canada slipped into a technical recession in the first quarter.
Looking ahead, the ‘loonie’ may be able to recoup some of these losses if oil prices continue to tick higher through today’s session.
Data releases
10:00 AUD RBA Harper Speech
19:00 EUR Inflation Rate (May)
00:00 USD JOLTS Job Openings (Apr)
01:00 GBP BoE Greene Speech