Australian Dollar (AUD) Flat as Victoria’s Coronavirus Outbreak Eases
The Australian Dollar (AUD) made gains against the Pound and Euro, but remained largely flat against the majority of its peers.
The ‘Aussie’ was offered some support after the latest outbreak in the new coronavirus epicentre of the country, Victoria, eased further yesterday. Only 12 deaths and 216 new cases were reported over the 24 hour period. Added to this, Australia also agreed a deal with AstraZeneca to produce and distribute enough of a potential vaccine for the population of 25 million.
Today could see support for the Australian Dollar increase as the number of reported coronavirus cases and deaths continues to decrease in Victoria.
Pound (GBP) Slides despite UK Inflation Hitting Highest Level since March
The Pound (GBP) slumped across the board on Wednesday, although the currency was largely driven by the US Dollar and left unfazed by the latest inflation data.
Britain’s latest inflation rate unexpectedly jumped to the highest level since March with consumer prices rising 1% in July, but failed to drive significant movement in GBP. Analysts believe that the Bank of England (BoE) is unlikely to draw conclusions from this data as the jump is expected to be temporary.
Sterling could continue to edge lower today as the seventh round of UK-EU post-Brexit trade talks continues with little progress being made after Brussels rejected London’s demands for wide-ranging access to the bloc for British truckers.
Euro (EUR) Mixed as Eurozone Inflation Rises
The Euro (EUR) was mixed on Wednesday after data revealed the bloc’s annual inflation rate rose slightly in July while core indicators jumped despite deflationary pressures amid the coronavirus crisis.
The increase in inflation surprised markets as many economists expected a slowdown of the Eurozone’s inflation rate due to weakened activity and Germany temporarily cutting sales tax.
Looking ahead, better-than-expected German producer prices and Eurozone construction output could support EUR. However, the Euro could give up any gains following the release of the latest European Central Bank’s (ECB) Monetary Policy Meeting Accounts.
US Dollar (USD) Left Near 27-Month Low
The US Dollar (USD) struggled during yesterday’s session and overnight holding just above a 27-month low as US-China trade tensions continued to weigh on the currency.
Doubts about the country’s progress containing the virus, deteriorating US-China relations and concerns about Congress’ relief package all drove the currency lower.
Investors also kept an eye on the latest monetary policy minutes from the Federal Reserve, watching any hints from policymakers that the bank will take further action in September.
Traders will be watching today’s latest US initial jobless claims for signs the recovery in the US economy is faltering which could send USD lower.
Canadian Dollar (CAD) Struggles as Inflation Slumps Unexpectedly
The Canadian Dollar (CAD) made gains against the Pound and Euro but struggled to rise against its other rivals after the latest inflation data disappointed traders.
Canadian inflation fell unexpectedly, dropping to just 0.1% in July, down from June’s reading of 0.7%. Statistics Canada noted the drop was due to ‘a broad-based slowdown in price growth’ across goods and services, especially plane tickets and accommodation.
Meanwhile, the ‘Loonie’ could continue to suffer losses during today’s session if the latest ADP Employment Change data disappoints investors.
New Zealand Dollar (NZD) Gains as US and China in Contact about Phase 1 Deal
The New Zealand Dollar (NZD) strengthened during Wednesday’s session despite the latest producer prices slumping.
Meanwhile, the risk-sensitive ‘Kiwi’ edged higher after reports revealed no new high-level US-China trade talks have been scheduled but Washington and Beijing remain in contact about implementing a Phase 1 trade deal.
Looking ahead, the New Zealand Dollar could make further gains today if risk appetite continues to benefit from signs of cooperation between the US and China.