Australian dollar (AUD) slides as inflation cools
The Australian dollar (AUD) slumped to weekly lows yesterday after Australian inflation unexpectedly cooled in the second quarter, from 4.1% to 3.9%.
This further dampened bets on a Reserve Bank of Australia (RBA) interest rate hike in August, particularly following comments from RBA Governor Michele Bullock earlier in the week.
Turning to today, a lack of Australian data could leave the ‘Aussie’ to trade on market risk appetite. Could fresh attacks in the Middle East sour the mood?
New Zealand dollar (NZD) struggles amid Middle East jitters
The New Zealand dollar (NZD) was subdued yesterday as markets remained on edge following reports that the US thwarted an ‘attempted surprise attack’ by Iran.
New Zealand’s latest business confidence index could dent NZD today if it points to a slight deterioration in morale in July.
Pound (GBP) rudderless in absence of data
The pound (GBP) continued to trade without a clear directional bias yesterday amid an ongoing lack of UK economic releases.
GBP investors were also cautious of placing aggressive bets ahead of the Bank of England (BoE) interest rate decision, which is being announced later today.
The BoE decision could drive notable movement in the pound. If the bank reiterates its cautious stance on interest rates, Sterling could slide.
Euro (EUR) unsure as markets await data releases
The euro (EUR) was also mixed yesterday, as an absence of Eurozone data left EUR with little fresh impetus.
The common currency was also muted as investors awaited some high-impact data due to be published through the latter part of the week.
The Eurozone’s second-quarter GDP figures are the focus for EUR investors today. Could a recovery in growth buoy the common currency?
US dollar (USD) wavers ahead of Fed decision
The US dollar (USD) traded in a narrow range yesterday, with investors avoiding taking strong positions in the currency ahead of the Federal Reserve’s interest rate decision.
In addition, a shifting market mood and lack of US economic data kept USD trading in a tight band.
Looking forward, the first estimate for US GDP in the second quarter and the core PCE price index for June are both due out today. Steady growth could support USD, although cooling inflation may put some pressure on the ‘greenback’.
Canadian dollar (CAD) firms as oil prices rise
The crude-linked Canadian dollar (CAD) rose late in yesterday’s session, with oil prices jumping around 7% following an Iranian ‘surprise attack’ in the Middle East and vows to retaliate from US President Donald Trump.
Oil price dynamics are likely to drive CAD today amid a lack of Canadian data. Could Fresh Middle East tensions see crude prices rise and therefore underpin the ‘loonie’?
Data releases
11:00 NZD ANZ Business Confidence (Jul)
19:00 EUR GDP Growth Rate (Q2)
21:00 GBP BoE Interest Rate Decision
22:30 USD Core PCE Price Index (Jun)
22:30 USD GDP Growth Rate (Q2)