Australian dollar (AUD) rallies as risk appetite returns
The Australian dollar (AUD) initially wavered yesterday amid an uncertain market mood.
However, AUD exchange rates then rallied in the evening as a cooldown in US inflation dampened Federal Reserve interest rate hike bets and lifted investor sentiment.
With Australian data still absent from the calendar today, market risk appetite could drive the ‘Aussie’. An upbeat mood may support AUD, although anxiety around the situation in the Middle East could sour sentiment.
New Zealand dollar (NZD) stumbles amid political concerns
The New Zealand dollar (NZD) fell yesterday amid a cautious mood and domestic political anxiety, although the ‘kiwi’ recouped some of its losses as sentiment improved in the evening.
Today, NZD could attract support if New Zealand business inflation expectations rose in the third quarter, as expected.
Pound (GBP) firms despite lack of data
The pound (GBP) trended higher against some of its weaker peers yesterday, despite the lack of a clear catalyst for the movement.
However, Sterling trimmed its gains in the evening, with the pound struggling to sustain its upside amid a lack of UK data.
The spotlight today falls on the UK’s GDP figures for the second quarter. Decent economic growth could lend Sterling modest support, while any unexpected results may drive steeper movement.
Euro (EUR) subdued as mood improves
The euro (EUR) edged lower against its riskier peers yesterday, as the improving mood dampened demand for EUR.
However, the common currency was spared steeper losses thanks to its strong negative correlation with the US dollar (USD), as the latter currency retreated.
Looking ahead, the euro may face subdued movement today, if Eurozone industrial production stalled in June as expected.
US dollar (USD) slides as US inflation dents Fed hike bets
The US dollar took a tumble yesterday as cooling US inflation dampened Federal Reserve interest rate hike bets.
With core and headline inflation easing for the second consecutive month, market odds for a September hike dropped from 48% to around 38%.
Turning to today, the latest producer price index may impact USD. If producer prices rose in July, it could help USD regain some ground.
Canadian dollar (CAD) wobbles as oil prices waver
The commodity-sensitive Canadian dollar (CAD) lacked a clear directional bias yesterday as crude prices continued to waver broadly sideways.
Oil price dynamics could drive the Canadian dollar again today, with further turbulence potentially leading to choppy movement in CAD.
Data releases
13:00 NZD Business Inflation Expectations (Q3)
16:00 GBP GDP Growth Rate (Q2)
19:00 EUR Industrial Production (Jun)
22:30 USD PPI (Jul)