Australian Dollar (AUD) Fluctuates on RBA Comments
The Australian Dollar (AUD) initially strengthened yesterday, with the currency being bolstered by hawkish comments from Reserve Bank of Australia (RBA) Assistant Governor Luci Ellis.
However, the ‘Aussie’ was unable to hold on to these gains for long, with the currency falling back later in the session as market risk appetite waned.
Should this bearish market mood continue to prevail the Australian Dollar may come under additional pressure today.
New Zealand Dollar (NZD) Soars Following RBNZ Rate Hike
The New Zealand Dollar (NZD) rocketed higher on Wednesday, in the wake of the Reserve Bank of New Zealand’s (RBNZ) latest interest rate decision.
While the RBNZ’s 50-basis point hike was expected, NZD investors were pleasantly surprised by the bank’s hawkish forward guidance.
However, the increasingly cautious mood could see the majority of these gains erased through the coming session.
Pound (GBP) Muted as Sue Gray Report Published
The Pound (GBP) wavered yesterday following the publication of Sue Gray’s report into lockdown breaches at Downing Street.
While the report wasn’t as damning of Prime Minister Boris Johnson as some GBP investors had feared, it was still enough to stir up some political uncertainty in the UK.
The focus will now turn to the government’s reported plan for dealing with the cost-of-living crisis which could be published as early as today. A positive reception to the plan could help to bolster Sterling.
Euro (EUR) Dented by Weak German Consumer Confidence
The Euro (EUR) ticked lower against the majority of its peers on Wednesday, as another worrying German consumer confidence reading took its toll on the single currency.
The Euro’s negative correlation with the US Dollar also weighed on EUR exchange rates as the ‘Greenback’ snapped a three-day losing streak.
With EUR data thin on the ground, the Euro could struggle to find any strong directional bias through the latter half of the week.
US Dollar (USD) Strengthens as Risk-Off Mood Prevails
The US Dollar (USD) firmed during yesterday’s session, with the currency being bolstered by risk-off flows and expectations for hawkish FOMC minutes.
However, these gains were tempered after US durable goods orders printed below expectations, rising by 0.4% in April versus the 0.6% expansion forecast.
The publication of the latest US GDP release could undermine the US Dollar this afternoon as it is set to confirm US economic growth contracted in the first quarter of the year.
Canadian Dollar (CAD) Buoyed as Oil Prices Firm
The Canadian Dollar (CAD) traded with modest gains on Wednesday, with the appeal of the oil-sensitive currency being bolstered by another uptick in crude prices.
The ‘Loonie’ may extend these gains today as Canada’s latest retail sales figures are expected to report a strong acceleration in sales growth in March.
Data Releases
May 26th 22:30 CAD Retail Sales (Mar) 1.4%
May 26th 22:30 USD GDP (Q1) -1.3%
May 26th 22:30 USD Initial Jobless Claims (21/May) 215,000