Australian dollar (AUD) hits fresh multi-week lows amid risk-off mood
The Australian dollar (AUD) extended its recent downside yesterday, striking a fresh 11-week low against the US dollar (USD), as markets remained risk averse.
New Australian inflation data failed to lift AUD, as mixed figures did little to alter Reserve Bank of Australia (RBA) interest rate expectations.
Looking ahead, Australia’s latest employment report is likely to be the focus for AUD investors today. An expected decline in unemployment could boost the ‘Aussie’.
New Zealand dollar (NZD) touches fresh lows in downbeat trade
The New Zealand dollar (NZD) fell to fresh multi-month lows yesterday as a gloomy mood dented NZD. However, the ‘kiwi’ did manage to bounce off its worst levels amid some dip-buying.
In the absence of any New Zealand data today, market risk dynamics could continue to drive NZD. The ‘kiwi’ could remain subdued if a risk-off mood prevails.
Pound (GBP) subdued in absence of data
The pound (GBP) was muted yesterday, stumbling against its stronger rivals and wavering elsewhere, amid a lack of UK economic data.
Sterling was also kept in limbo by the political situation in the UK. While investors are relieved that the Labour Party may have avoided a lengthy leadership contest, uncertainty remains over the government’s future policy direction.
The Confederation of British Industry’s (CBI) latest distributive trades survey may have a limited impact on the pound today. Instead, GBP investors may focus on domestic political headlines.
Euro (EUR) struggles amid USD strength
The euro (EUR) initially came under pressure yesterday due to its strong negative correlation with the rising US dollar.
However, the common currency avoided further losses later in the session, thanks in part to an improvement in German business morale in June.
Turning to today, markets are expecting another positive German data release. Consumer confidence is expected to have improved heading into July. Could this help the euro regain its footing?
US dollar (USD) continues to climb amid risk aversion
USD continued its recent winning streak yesterday, with the US dollar index hitting its highest level in over a year, as a pessimistic market mood prevailed.
Ongoing anxiety around a possible AI bubble and higher interest rates from the Federal Reserve saw investors shun riskier assets and favour the safe-haven ‘greenback’.
The focus today falls on the latest US core PCE price index, the Fed’s preferred measure of inflation. If price pressures accelerated in May, interest rate hike bets could lift the US dollar.
Canadian dollar (CAD) buoyed by rising USD
The Canadian dollar (CAD) ticked higher against some peers yesterday thanks to its positive correlation with USD, although weaker oil prices limited the crude-linked currency’s potential.
Today, a lack of Canadian data could leave CAD to trade on oil prices movements. Ongoing weakness in crude could weigh on the ‘loonie’.
Data releases
11:30 AUD Unemployment Rate (May)
16:00 EUR German GfK Consumer Confidence (Jul)
20:00 GBP CBI Distributive Trades (Jun)
22:30 USD Core PCE Price Index (May)
22:30 USD GDP Growth Rate (Q1)