Australian dollar (AUD) steady as markets brush off geopolitical risk
The Australian dollar (AUD) wavered sideways yesterday as markets showed remarkable resilience despite escalating violence in the Middle East.
Investors seemed unfazed by the flare-up of US-Iran tensions, with market risk appetite remaining broadly neutral through the session.
With Australian data absent from the calendar today, AUD may trade on market risk dynamics. If US-Iran tensions continue to escalate, an anxious mood could pressure the ‘Aussie’.
New Zealand dollar (NZD) extends rally as PMI smashes forecasts
The New Zealand dollar (NZD) surged to multi-week highs yesterday, as New Zealand’s latest manufacturing PMI smashed expectations to hit its highest level in almost five years.
This helped the ‘kiwi’ build on its momentum following the hawkish Reserve Bank of New Zealand (RBNZ) interest rate hike on Wednesday.
Domestic economic data thins out for NZD as the week draws to an end. As a result, risk appetite could drive the New Zealand dollar, with events in the Middle East potentially determining the market mood.
Pound (GBP) wobbles amid profit-taking
The pound (GBP) was choppy on Thursday as a lack of data left the UK currency exposed to volatility.
Sterling initially firmed against some of its rivals as easing UK political uncertainty supported the currency. However, GBP seemed to suffer some profit-taking later in the session.
A lack of UK data today could limit the pound at the end of the week. However, Sterling may avoid losses if fading political risk continues to underpin the currency.
Euro (EUR) buoyed by German trade data
The euro (EUR) traded with modest gains overall yesterday, although the upside was somewhat bumpy.
A larger-than-forecast expansion in Germany’s trade surplus in May lent EUR support, with the country’s trade balance rising from €14.7bn to €19.1bn.
Market-moving Eurozone data is in short supply today, potentially leaving the single currency to trade without a clear trajectory.
US dollar (USD) softens amid resilient risk appetite
The US dollar (USD) wavered lower yesterday as renewed conflict between the US and Iran failed to lift the safe-haven ‘greenback’.
Risk appetite remained resilient despite escalating tensions in the Middle East. In addition, the Federal Reserve’s latest policy meeting minutes saw the bank take a neutral stance.
Safe-haven demand could determine the US dollar’s direction today. If sentiment eventually sours amid concerns about renewed conflict in the Middle East, the ‘greenback’ could tick higher.
Canadian dollar (CAD) slips as oil prices retreat
The crude-linked Canadian dollar (CAD) also weakened yesterday as oil pared some of its recent gains, with investors seeming hopeful that the latest US-Iran clashes would not derail longer-term plans for peace.
Canada’s latest jobs report could impact CAD today, particularly if there are any surprises. Meanwhile, oil price movements could continue to influence the ‘loonie’.
Data releases
22:30 CAD Unemployment Rate (Jun)