Australian Dollar (AUD) Tumbles on RBA Headwinds
The Australian Dollar (AUD) fell against its peers on Friday following the release of the Reserve Bank of Australia (RBA)’s monetary policy statement.
The MPS revised down growth forecasts, forecasting a 1.75% cash rate in December 2022, adding that the Board is not currently planning on selling the government bonds that were purchased during the pandemic.
Today, China’s trade surplus is expected to print at $50.65bn for the month of April, up from $47.38bn in March, possibly supporting AUD in its role as a proxy for China’s economy.
New Zealand Dollar (NZD) Strengthens Overall on Upbeat Forecasts
Although downside in the ‘Aussie’ often weighs upon the New Zealand Dollar (NZD), the currency found support at the end of last week as economists forecast NZD tailwinds.
Analysts at ANZ bank said they expected the currency to strengthen as the year progresses.
Looking ahead, a lack of NZ data leaves the ‘Kiwi’ to trade on risk sentiment today; if geopolitical tensions subside, the New Zealand Dollar could climb.
Pound (GBP) Falls on Fears of Recession
The Pound (GBP) weakened against its peers on Friday as domestic economic concerns dampened Sterling support.
Addressing rising UK inflation and lagging wage growth, Bank of England (BoE) policymaker Huw Pill remarked that lower living standards are inevitable for many Britons. Various economists focused upon the bank’s recent ‘recession’ comments, inspiring a bearish mood.
A lack of significant data today may expose Sterling to further downside today, as the UK’s cost-of-living crisis continues to push more people into poverty.
Euro (EUR) Climbs despite Disappointing German Data
The Euro (EUR) trended up at the end of last week, as European Central Bank (ECB) speakers struck an uncharacteristically hawkish tone.
While Germany’s industrial production shrank 3.9% in March 2022, EUR sentiment was buoyed as France’s ECB head Francois Villeroy de Galhau said it was reasonable to raise rates into positive territory by the year-end.
The single currency may trade on US Dollar (USD) dynamics today, given a lack of EU data – EUR’s strong negative correlation with USD means strength in the ‘Greenback’ often subdues the Euro.
US Dollar (USD) Boosted by Nonfarm Payrolls
The US Dollar (USD) edged higher on Friday, as a souring market mood and upbeat non-farm payroll data sponsored a wave of support for the currency.
The US economy added 428K jobs in April rather than the 391K expected, elevating the ‘Greenback’ in spite of a higher-than-forecast unemployment rate. Unemployment in April remained at 3.6% rather than dropping to 3.5% as predicted.
Wholesale inventories are expected to have risen in March by 2.3%, potentially bolstering USD today – speeches from the Fed’s Raphael Bostic could also inspire upside if Bostic strikes a hawkish tone.
Canadian Dollar (CAD) Subdued by Employment Data
The Canadian Dollar (CAD) sloped down at the end of the week, pressured by a disappointing jobs report.
The Canadian economy only added 15.3K jobs in April 2022, as opposed to the 55K forecast, offsetting a rise in oil prices which may have otherwise bolstered the commodity-linked currency.
Data Releases
May 9th 09:00 USD Fed Bostic Speech N/A
May 9th 22:45 USD Fed Bostic Speech N/A
May 10th 00:00 USD Wholesale Inventories (Mar) 2.3%