Australian Dollar (AUD) Fluctuates as RBA Tailwinds may be Spent
The Australian Dollar (AUD) traded in a mixed range on Thursday, on forecasts of limited Reserve Bank of Australia (RBA) tailwinds.
A Commerzbank representative said: ‘As the market has already priced in a reasonably tight rate cycle, AUD is unlikely to be able to benefit much more from a restrictive RBA in May.’
Today’s flash PMI data will likely influence trading – if manufacturing and services activity fell in April as expected, AUD could succumb to bearish pressure.
New Zealand Dollar (NZD) Firms in Wake of Disappointing Inflation
The New Zealand Dollar (NZD) recouped some of its losses yesterday, despite New Zealand’s annual inflation printing at 6.9% rather than 7.1% as expected.
Investors worried initially that the Reserve Bank of New Zealand (RBNZ) may be less likely to hike rates by 50 bps in May. Nevertheless, ‘Kiwi’ sentiment recovered, supported by Chinese lockdown easing.
A lack of significant NZ data leaves the currency at the mercy of external factors today: if risk sentiment wobbles on geopolitical tensions, NZD could slide.
Pound (GBP) Sentiment Dented by Dovish Mann Comments
The Pound (GBP) slumped on Thursday as Bank of England (BoE) policymaker Catherine Mann said that the embedding of current inflation in firms’ pricing is a concern.
Mann added that higher pricing threatens a situation in 2023 where pricing remains robust as demand remains weak.
A speech from BoE Governor Andrew Bailey may restore some GBP upside today, although PMI and retail sales growth are expected to have declined in April and March, respectively.
Euro (EUR) Jumps in Response to Hawkish ECB comments
The Euro (EUR) strengthened yesterday in response to some hawkish comments from the European Central Bank (ECB).
Following a record Eurozone inflation print, ECB policymaker Martins Kazaks’s comments that ‘a rate hike is possible as soon as July’, a sentiment echoed by colleague Luis de Guindos.
PMI data could reverse EUR gains today, as manufacturing and services activity are expected to have fallen across the Eurozone.
US Dollar (USD) Trades Mixed on Fed Uncertainty
The US Dollar (USD) fluctuated on Thursday, on mixed comments from Federal Reserve representatives.
Chicago Fed’s Charles Evans said he was not expecting inflation to drop back to 2% next year, while Mary Daly remarked it would be ‘surprising’ to see the policy rate at 2.5% in 2022.
Nevertheless, markets appear confident that the Fed will soon tighten monetary policy at a faster pace and if Chairman Jerome Powell’s comments confirm this, USD may firm through today’s session.
Canadian Dollar (CAD) Trades in Choppy Range on Crude Dynamics
The Canadian Dollar (CAD) wavered against its peers yesterday on crude oil dynamics. Supply concerns elevated cost pressures, while slowing global growth forecasts simultaneously dampened perceived demand.
Today’s retail data may send the ‘Loonie’ lower, if sales fell by 0.1% in February as expected.
Data Releases
Apr 22nd 09:00 AUD S&P Global Manufacturing PMI Flash (Apr) 57
Apr 22nd 09:00 AUD S&P Global Services PMI Flash (Apr) 55
Apr 22nd 16:00 GBP Retail Sales (Mar) -0.3%
Apr 22nd 18:00 EUR S&P Global Manufacturing PMI Flash (Apr) 54.7
Apr 22nd 18:00 EUR S&P Global Services PMI Flash (Apr) 55
Apr 22nd 18:30 GBP S&P Global/CIPS Manufacturing PMI Flash (Apr) 54
Apr 22nd 18:30 GBP S&P Global/CIPS Services PMI Flash (Apr) 60
Apr 22nd 22:30 CAD Retail Sales (Feb) -0.1%
Apr 22nd 23:00 EUR ECB Lagarde Speech N/A
Apr 22nd 23:45 USD S&P Global Manufacturing PMI Flash (Apr) 58.2
Apr 22nd 23:45 USD S&P Global Services PMI Flash (Apr) 58
Apr 23rd 00:30 GBP BoE Gov Bailey Speech N/A