Australian dollar (AUD) sapped by market caution
The Australian dollar (AUD) was left muted on Thursday as a cautious market mood saw investors largely shun the risk-sensitive currency.
Further limiting AUD’s upside potential was Australia’s latest consumer inflation expectations survey, which suggests households are becoming less concerned over price pressures.
Australian data remains in short supply today, which is likely to leave the ‘Aussie’ vulnerable to further losses if the mood remains downbeat.
New Zealand dollar (NZD) slides in risk-off trade
The New Zealand dollar (NZD) trended lower through yesterday’s session, pressured by the weakening of market risk appetite.
This morning sees the publication of New Zealand’s latest manufacturing PMI, with the ‘kiwi’ poised to slide if May’s index points to a further slowing of factory sector growth.
Pound (GBP) subdued following ministerial resignation
The pound (GBP) struggled to attract support on Thursday, following the sudden resignation of UK Defence Secretary John Healey.
Healey’s resignation over new defence spending plans piles even more pressure on Prime Minister Keir Starmer and makes his replacement seem even more inevitable.
Coming up, the UK’s latest GDP figures could apply pressure to the pound today as April’s data is forecast to report a contraction of growth.
Euro (EUR) steady as ECB raises rates
The euro (EUR) was stable yesterday in the wake of the European Central Bank’s (ECB) latest interest rate decision.
While the ECB tightened monetary policy for the first time in a year, the 25bps hike had been priced in by investors well ahead of time, leading to only a modest response to the bank’s upwardly revised inflation forecasts.
In the absence of any notable Eurozone economic releases, movement in the euro may be driven by wider market trends today.
US dollar (USD) buoyed by Middle East jitters
The US dollar caught bids again on Thursday as fresh tensions in the Middle East underpinned demand for safe-haven assets.
This followed a social post from US President Donald Trump, in which he threatened to hit Iran ‘very hard’ and to seize Kharg Island, Iran’s primary oil export hub.
Closing out this week’s session will be the publication of the University of Michigan’s latest US consumer sentiment index, with an expected uptick in morale this month potentially lifting the US dollar.
Canadian dollar (CAD) softens as oil prices retreat
The Canadian dollar (CAD) trended lower on Thursday, with demand for the commodity-linked currency being undermined by retreating oil prices.
Expect movement in the ‘loonie’ to remain tied to oil price dynamics today, with a further weakening of prices likely to drag on CAD.
Data Releases
08:30 NZD Business NZ PMI (May)
16:00 GBP GDP (Apr)
00:00 USD Consumer Sentiment (Jun)