Australian Dollar (AUD) Strengthens amid Improved Risk Appetite
The Australian Dollar (AUD) edged higher on Tuesday, with the currency finding support thanks to risk-on flows.
This uptick in the ‘Aussie’ was supported by Australia’s latest retail sales figures as March’s final figures confirmed a robust 1.6% expansion in sales growth.
Looking ahead, will a deterioration in Westpac’s latest consumer confidence index exert fresh pressure on AUD exchange rates today?
New Zealand Dollar (NZD) Subdued by Lack of Data
The New Zealand Dollar (NZD) also benefited by the improvement in risk appetite yesterday, although these gains were fairly modest in scope.
In the continued absence of any notable NZD data releases, the direction of the ‘Kiwi’ is likely to continue to be driven by risk dynamics today.
Pound (GBP) Subdued Following Queens Speech
The Pound (GBP) struggled to attract support on Tuesday as GBP investors were left largely disappointed by the UK government economic plans as outlined in the Queen’s speech.
While the government announced it would seek to boost growth and tackle the cost of living crisis there was a lack of clarity over how it would achieve this.
Amid a lull in UK data today, Sterling may face an uphill battle as concerns over the UK’s economic trajectory persist.
Euro (EUR) Fluctuates on Positive German Economic Sentiment Index
The Euro (EUR) trended higher through the first half of yesterday’s session, following surprise improvement in the latest German ZEW economic sentiment index.
However, these gains were later erased amidst ongoing concerns over the war in Ukraine, as the EU pressed ahead with plans to ban Russian oil imports.
Turning to today’s session, the focus is likely to be on a speech by European Central Bank (ECB) President Christine Lagarde as EUR investors look for any signs her resistance to begin tightening monetary policy may be softening.
US Dollar (USD) Rangebound in Uneven Trade
The US Dollar (USD) traded without a strong directional bias on Tuesday, with the currency initially giving ground as equity markets rebounded following Monday’s selloff.
While the USD selling bias remained broadly in place throughout the session, the ‘Greenback’ was able to claw back some of its losses overnight as recession concerns continued to lend support.
The publication of US consumer price index will no doubt be the focus today. Will a slowing of inflation last month relieve some of the pressure on the Federal Reserve to aggressively raise interest rates and weaken the US Dollar in the process?
Canadian Dollar (CAD) Firms Despite Subdued Oil Prices
The Canadian Dollar (CAD) trended higher again on Tuesday, with the commodity-linked currency attracting support in spited of a modest fall in oil prices.
Data Releases
May 11th 10:30 AUD Westpac Consumer Confidence (May) 94.7
May 11th 16:00 EUR German Inflation Rate (Apr) 7.4%
May 11th 18:00 EUR ECB Lagarde Speech N/A
May 11th 22:30 USD Inflation Taye (Apr) 8.1%