Australian Dollar (AUD) Firms in Risk-On Trade
The Australian Dollar (AUD) firmed on Wednesday, bolstered by a prevailing risk-on mood.
Reinforcing the upside in the ‘Aussie’ was the news that Chinese authorities would begin easing Shanghai’s lockdown and allow factories in the city to resume production.
Turning to today’s session, a lack of data could limit movement in the Australian Dollar, although the currency could continue to trend higher if the risk-on mood persists.
New Zealand Dollar (NZD) Buoyed by Bullish Mood
The New Zealand Dollar (NZD) largely mirrored the movement of the Australian Dollar yesterday, with the ‘Kiwi’ firming amid an upbeat market mood.
New Zealand’s latest inflation figures will be in the spotlight today. Will a sharp acceleration of inflation in the first quarter of 2022 be seen as placing more pressure on the Reserve Bank of New Zealand (RBNZ) to continue raise rates, buoying NZD exchange rates in the process?
Pound (GBP) Struggles to Find Direction amid Lull in Data
Trade in the Pound (GBP) was mixed on Wednesday, with a lull in data leaving the currency without a strong directional bias.
While Sterling benefitted from the upbeat market mood, it was unable to attract much support amidst uncertainty over the Bank of England’s (BoE) next interest rate decision.
A couple of speeches from BoE policymakers could offer some direction to the Pound today, although movement is likely to remain limited ahead of Governor Andrew Bailey’s more influential speech at the end of the week.
Euro (EUR) Bolstered by Robust Data
The Euro (EUR) trended higher through the first half of yesterday’s European session, with the single currency being strengthened on the back of better-than-expected Eurozone trade figures and a robust industrial production print.
However, these gains were sapped latter in the session amidst fresh concern over the war in Ukraine amidst fears events in Mariupol could make peace talks more difficult.
Coming up later this evening the Eurozone will release its latest consumer price index. Will March’s finalised figures overshoot expectations and place more pressure on the European Central Bank (ECB) to take action?
US Dollar (USD) Undermined by Upbeat Market Sentiment
The US Dollar (USD) was placed on the backfoot yesterday, with demand for the safe-haven currency being sapped by the prevailing bullish mood.
Adding to the ‘Greenback’s woes was a continued pullback in US Treasury yields, which continued to fall in spite of hawkish Federal Reserve expectations.
Looking ahead, USD investors will be waiting for a speech by Fed Chair Jerome Powell for fresh impetus later tonight. Will Powell reinforce these hawkish expectations and help to revive demand for the US Dollar?
Canadian Dollar (CAD) Jumps on Hotter-than-Expected Inflation
The Canadian Dollar (CAD) rallied overnight on Wednesday, following the release of Canada’s latest consumer price index as a much stronger-than-expected inflation reading in March bolstered expectations for further rate hikes from the Bank of Canada (BoC).
The ‘Loonie’ may look to consolidate these gains today, if oil prices continue to tick higher.
Data Releases
Apr 21st 08:45 NZD Inflation Rate (Q1) 7.1%
Apr 21st 19:00 EUR Inflation Rate (Mar) 7.5%
Apr 21st 21:30 GBP BoE Sweeney Speech
Apr 21st 22:30 USD Initial Jobless Claims (16/Apr) 180,000
Apr 21st 23:00 GBP BoE L Mann Speech
Apr 22nd 00:00 EUR Consumer Confidence (Apr) -20
Apr 22nd 01:00 USD Fed Powell Speech