Australian Dollar (AUD) Supported by Upbeat Market Mood
The Australian Dollar (AUD) firmed in mid-week trade in spite of a worse-than-expected consumer confidence release from the Westpac Banking Corporation.
Buoying the ‘Aussie’ was an overall risk-on market mood triggered by signs of stability in the financial markets, as well as positive data from China: industrial production rose in May on an annualised basis and unemployment decreased against expectations.
Today, Australia’s jobs figures could lend further support to AUD, if unemployment fell in May as expected.
New Zealand Dollar (NZD) Trades Mixed as Investors Await GDP Release
The New Zealand Dollar (NZD) fluctuated on Wednesday as markets held their breath ahead of the country’s GDP release.
The economy is New Zealand is expected to have expanded in Q1 2022, but by a comparatively small amount; today’s data could dent the ‘Kiwi’ if investors interpret the release as proof of an economic slowdown.
Pound (GBP) Firms Ahead of BoE Decision
The Pound (GBP) found some support in the second half of yesterday’s European session as the currency’s recent slump made it attractive to price conscious investors.
However the gains were likely tempered ahead of the Bank of England (BoE) latest interest rate decision.
A relatively modest 25bps rate hike from the BoE is likely to disappoint GBP investors today and could push the Pound lower.
Euro (EUR) Weakens on Vague Forward Guidance From the ECB
The Euro (EUR) slumped against its peers on Wednesday, following a noncommittal statement from the European Central Bank (ECB).
Markets had hoped that the bank would announce proactive steps to mitigate fragmentation in European bond markets but the ECB remained vague, only stating it would ‘apply flexibility’ in reinvesting PEPP redemptions.
Any expansion upon the plans of Europe’s central bank may affect the Euro today, as speeches from the ECB’s Fabio Panetta and Luis de Guindos provide opportunities for clarification.
US Dollar (USD) Trades Erratically Ahead of Fed Decision
The US Dollar (USD) experienced some turbulence yesterday amidst some pre-Fed volatility.
Hawkish signals from the Federal Reserve Bank sparked concerns that aggressive policy tightening measures may trigger a global recession, drawing support to the safe-haven ‘Greenback’ –subsequently, US bond yields retreated along with support for the currency.
Today, USD may recoup some losses in the aftermath of the Fed’s decision – further risk-on sentiment could cap gains, however.
Canadian Dollar (CAD) Reverses Gains as Crude Prices Lower
The Canadian Dollar (CAD) retreated yesterday as a softer tone around crude oil prices undermined the commodity-linked currency.
The worsening global economic outlook raised concerns about fuel demand, pulling the black gold away from a three-month high reached on Tuesday.
Data Releases
Jun 16th 08:45 NZD GDP Growth Rate (Q1) 0.6%
Jun 16th 11:30 AUD Unemployment Rate (May) 3.8%
Jun 16th 11:30 AUD Employment Change (May) 25K
Jun 16th 11:30 AUD RBA Bulletin N/A
Jun 16th 21:00 GBP BoE Interest Rate Decision 1.25%
Jun 16th 21:00 GBP MPC Meeting Minutes N/A
Jun 16th 22:30 USD Initial Jobless Claims (11/Jun) 215K