Australian dollar (AUD) rebounds despite RBA rate hold
The Australian dollar (AUD) initially fell yesterday after the Reserve Bank of Australia (RBA) left interest rates unchanged.
However, the ‘Aussie’ was able to rally in the evening. A slightly hawkish tone from RBA Governor Michele Bullock aided AUD, as did an improvement in market risk appetite.
Australian data is absent from the calendar today, likely leaving the ‘Aussie’ to trade on market risk appetite. Any shifts in sentiment could trigger AUD volatility.
New Zealand dollar (NZD) choppy as market mood shifts
The New Zealand dollar (NZD) fluctuated yesterday as a shifting market mood and a lacklustre business confidence index impacted the currency.
Risk sentiment could also be the defining factor for NZD exchange rates today, with investors likely monitoring the situation in the Middle East.
Pound (GBP) subdued amid lack of data
The pound (GBP) softened slightly yesterday as a lack of UK economic data left the currency without clear support.
UK bond market movements added to the uncertainty, with gilt yields rising above 5% before retreating in the evening as oil prices declined.
With UK data still absent from the calendar today, Sterling may be subdued, particularly with the UK’s GDP figures due to be published tomorrow.
Euro (EUR) uncertain amid quiet trade
The euro (EUR) wavered without a clear direction yesterday as Eurozone economic data was thin on the ground.
External drivers also failed to have a decisive impact on EUR, with the US dollar (USD) trading in a tight range and risk appetite remaining uncertain.
Looking ahead, Germany’s final inflation print for July could impact EUR. If the data confirms an uptick in inflation, the single currency could enjoy support.
US dollar (USD) unsure as sentiment wavers
The US dollar faced uncertain movement yesterday as a lack of US economic data left the currency to trade on market risk appetite.
This saw the safe-haven ‘greenback’ waver amid a shifting mood.
The focus today will be the latest US consumer price index. If inflation cooled last month, the US dollar could come under pressure.
Canadian dollar (CAD) finds fleeting gains amid volatile oil
The crude-linked Canadian dollar (CAD) initially firmed yesterday as oil prices briefly spiked above $90 per barrel. However, CAD eased off its highs as crude prices softened in the evening.
Turning to today, crude prices could continue to influence the ‘loonie’. Further volatility could lead to turbulence in CAD exchange rates.
Data releases
16:00 EUR German Inflation Rate (Jul)
22:30 USD Inflation Rate (Jul)