Australian dollar (AUD) soars amid improving market sentiment
The Australian dollar (AUD) ended last week’s session on a high note, recovering the bulk of Thursday’s losses amid a considerable upswing in market risk appetite.
AUD’s ascent was also aided by Australia’s latest PMIs, which outpaced consensus estimates in August.
Looking ahead, movement in the ‘Aussie’ may be limited today, amid a lull in data ahead of the release of the minutes from the Reserve Bank of Australia’s (RBA) latest policy meeting on Tuesday.
New Zealand dollar (NZD) bolstered by risk-on flows
The New Zealand dollar (NZD) was also strengthened by positive risk flows on Friday, although these gains were tempered slightly after New Zealand recorded a larger-than-expected trade deficit in July.
Coming up, New Zealand’s quarterly retail sales data may act as a headwind for the ‘kiwi’ at the start of this week if sales growth contracted as forecast in Q2.
Pound (GBP) muted as UK consumer spending slumps
The pound (GBP) struggled to attract support at the end of last week as the UK reported a sizable contraction in retail sales in July, despite the positive impact of the World Cup and the warmer weather.
Sterling sentiment was further suppressed by the UK’s latest borrowing figures, after they showed the government ran a surprise deficit last month.
Notable UK economic data dries up this week, which may leave the pound to trade without strong directional bias through the start of the session.
Euro (EUR) sidelined by positive risk flows
The euro (EUR) was muted through Friday’s session as the improvement in risk appetite weakened the single currency’s safe-haven appeal.
This left the euro unable to advance, despite the Eurozone’s latest PMIs reporting a surprise uptick in growth in the bloc’s private sector this month.
Eurozone data is in short supply today, which may leave the euro to remain in a narrow range through the start of the week.
US dollar (USD) continues to be punished by Treasury buybacks
The US dollar (USD) slipped to fresh multi-month lows at the end of last week as the recent USD selling bias remained firmly in place.
While the latest US PMIs surprised to the upside, it failed to assuage ongoing concerns over the US Treasury’s new bond buyback operation.
In the absence of any fresh impetus for movement, will US debt concerns extend the USD selloff today?
Canadian dollar (CAD) buoyed by rising oil prices
The Canadian dollar (CAD) ticked higher on Friday, with the commodity-linked currency catching bids as rising oil prices helped to offset weaker-than-expected domestic retail sales data.
Expect investors to remain bullish on the ‘loonie’ through today’s session if global energy prices continue to climb.
Data Releases
08:45 NZD Retail Sales (Q2)