Australian Dollar (AUD) Rises on Risk-On Mood
The Australian Dollar (AUD) found support on a risk-on market mood on Friday, as political concerns abounded and weakness in the US Dollar drove its peers upward.
AUD also benefitted from China’s proposal of a regional trading pact. In extending the offer, China neglected to mention the billion-dollar sanctions it recently imposed upon Australian imports.
Into next week, Australian business confidence looks set to fall, with potential to weigh upon the ‘Aussie’. However, if relations with China continue to strengthen, the Australian Dollar may find support therein.
Pound (GBP) Buoyed in Spite of Weak GDP Figures
The Pound (GBP) was able to maintain a positive trajectory through the end of last week’s session, as the currency rode the wave of upbeat sentiment higher.
This allowed sterling to shrug off a lacklustre domestic GDP release, which revealed the UK economy slowed to a crawl in July, despite more of the economy having opened back up.
The focus for GBP investors at the start of this week will be on the UK’s latest jobs report. Will another drop in unemployment help to buoy the pound, or will ongoing fears over a potential spike in the jobless rate once the government winds down its furlough scheme, sap Sterling sentiment?
Euro (EUR) Dented by Dovish Lagarde Comments
The Euro (EUR) was placed on the defensive on Friday, following a speech from European Central Bank (ECB) President Christine Lagarde in which she reiterated the ECB’s dovish message from its recent policy statement.
Lagarde said the ECB aims to ‘continue to provide the necessary support in order to maintain favourable financing conditions’, warning that the Eurozone economy still isn’t out of the woods yet.
Meanwhile, in the absence of any notable EUR data releases, could the euro continue to struggle to attract support through the first half of this week’s session?
US Dollar (USD) Dented by Upbeat Market Sentiment
A bullish market mood saw investors largely shun the US Dollar (USD) at the end of last week, in favour of higher yielding currencies.
Helping to cap the ‘greenback’s losses however was an uptick in US Treasury yields and speculation that the Federal Reserve is likely to announce its tapering plans following its next policy meeting.
Looking ahead, the latest US consumer price index could see the US dollar weaken this week, as an expected slowing of domestic inflation last month could dampen speculation over the pace at which the Federal Reserve may begin tightening its monetary policy.
Canadian Dollar (CAD) Firms as Unemployment Falls to New Post-Pandemic Low
The Canadian Dollar (CAD) trended higher on Friday, bolstered by Canada’s latest jobs figures, after they revealed domestic unemployment fell to 7.1% last month, its lowest level since the start of the coronavirus pandemic.
Also buoying CAD sentiment was a strong uptick in oil prices, with WTI crude nearing $70 a barrel.
New Zealand Dollar (NZD) Firms in Upbeat Trade
The New Zealand Dollar (NZD) closed last week on a high, as the high-yield currency attracted support amidst a prevailing risk-on mood.