Australian Dollar (AUD) Seesaws on Mixed Trade Sentiment
The Australian Dollar (AUD) traded in a wide range yesterday as the risk-sensitive currency fluctuated in response to mixed market sentiment.
This saw the ‘Aussie’ ultimately end the session on the back foot as a worrying US GDP reading unsettled markets.
A cautious mood could see AUD exchange rates remain subdued through the end of this week’s session.
New Zealand Dollar (NZD) Stumbles in Cautious Trade
Movement in the New Zealand Dollar (NZD) echoed that of the Australian Dollar on Thursday, with the ‘Kiwi’ fluctuating before closing the session lower amid a souring market mood.
Market risk dynamics will continue to act as a key catalyst of movement for NZD exchange rates today, potentially leading to further losses if a bearish mood prevails again.
Pound (GBP) Fluctuates as Cost of Living Support Package Published
The Pound (GBP) initially pushed higher yesterday, buoyed by optimism ahead of the announcement of Chancellor Rishi Sunak’s new cost of living support package.
However these gains proved short lived, with Sterling falling back again despite Sunak’s fiscal support apparently exceeding expectations.
There is a chance that the Pound could still receive an end-of-week bounce as markets continue to digest the fiscal package.
Euro (EUR) Buoyed by ECB Rate Hike Bets
The Euro (EUR) trended broadly higher on Thursday, with demand for the single currency being underpinned as EUR investors continued to price in expectations for a series of European Central Bank (ECB) interest rate hikes, starting in July.
However ongoing concerns over the war in Ukraine and its impact on the Eurozone economy acted as a break on the Euro and prevented any meaningful gains.
Looking ahead, EUR investors are likely to look to a speech by ECB policymaker Philip Lane for fresh impetus today.
US Dollar (USD) Buoyed as US GDP Disappoints
After initially stumbling amid positive risk appetite, the US Dollar (USD) was able to bounce back yesterday in response to the latest US GDP figures.
The second estimate for growth in the first quarter saw US GDP revised down from -1.3% to -1.5%. This sparked fresh concerns over global growth and actually buoyed demand for the safe-haven currency.
Coming up, the US Dollar could face some headwinds today as another drop in the core PCE price index could further dampen hopes for a 75bps rate hike from the Federal Reserve.
Canadian Dollar (CAD) Stable as Oil Prices Rise
The Canadian Dollar (CAD) was able to hold its ground on Thursday as another rise in oil prices helped to offset a disappointing retail sales print.
If oil prices continue to rise today, then the ‘Loonie’ may look to extend its gains.
Data Releases
May 27th 21:30 EUR ECB Lane Speech
May 27th 22:30 USD Core PCE Prices Index (Apr) 4.9%
May 27th 22:30 USD Personal Spending (Apr) 0.7%