Australian dollar (AUD) buoyed as commodity prices climb
The Australian dollar (AUD) firmed yesterday as rising commodity prices underpinned the resource-linked ‘Aussie’.
AUD was also supported by a surprisingly resilient market mood. Despite tensions in the Middle East, investors were cheered by Tuesday’s softer US inflation figures.
Australia’s latest consumer inflation expectations release could influence AUD today, if it deviates from forecasts. Elsewhere, market risk appetite may drive the ‘Aussie’.
New Zealand dollar (NZD) firms despite downbeat spending data
The New Zealand dollar (NZD) also gained ground yesterday, despite new data showing a surprise slump in domestic credit card spending last month.
With New Zealand data absent from the calendar today, risk sentiment could be the defining factor for NZD. If the intensifying conflict in the Middle East sours the mood, the ‘kiwi’ could struggle.
Pound (GBP) firms amid Chancellor rumours
The pound (GBP) wavered higher yesterday, as GBP investors responded positively to reports that incoming Prime Minister Andy Burnham is unlikely to appoint Ed Miliband as Chancellor of the Exchequer.
Miliband, who had been the frontrunner to head up the Treasury, is seen as less market-friendly, with investors favouring other reported candidates who are viewed as more fiscally cautious.
Turning to today, the UK’s latest GDP figures are in the spotlight for GBP investors. An expected 0.1% rebound in growth may offer the pound modest support.
Euro (EUR) choppy following mixed data
The euro (EUR) fluctuated yesterday, as mixed Eurozone data left the currency lacking a clear trajectory.
Industrial production in the bloc unexpectedly contracted in May, although output was revised higher in April.
Market-moving Eurozone data is in short supply today, potentially leaving the single currency to trade without a clear directional bias once again.
US dollar (USD) pressured as soft CPI continues to weigh
The US dollar (USD) remained under pressure yesterday as the steep slowdown in US inflation, published on Tuesday night, continued to weigh on USD exchange rates.
The ‘greenback’ was cushioned slightly by ongoing US-Iran tensions, but a surprise decline in US consumer prices applied fresh pressure on USD in the evening.
Looking ahead, a forecast slowdown in US retail sales in June could dent the US dollar later today.
Canadian dollar (CAD) slips following BoC decision
The Canadian dollar (CAD) retreated yesterday as the Bank of Canada (BoC) struck a broadly cautious tone after leaving interest rates unchanged.
Today, oil price dynamics may drive CAD exchange rates, amid a lack of Canadian economic data. If crude continues to climb, the commodity-sensitive ‘loonie’ could also gain ground.
Data releases
11:00 AUD Consumer Inflation Expectations (Jul)
16:00 GBP GDP (May)
22:30 USD Retail Sales (Jun)