Australian Dollar (AUD) Sinks as Market Mood Sours
After a day of positive trading sentiment on Thursday, Friday’s European session saw a risk-off mood prevail, weakening the Australian Dollar (AUD).
However the currency rebounded later in the session as key commodities climbed in value.
Today, a lack of Australian data leaves the ‘Aussie’ to trade on external factors – if China’s inflation rate meets expectations over the weekend, AUD could firm.
New Zealand Dollar (NZD) Fluctuates in Mixed Trade
The New Zealand Dollar (NZD) traded in a wide range at the end of last week amidst a fluctuating market mood.
Market risk appetite is likely to continue to dictate the direction of the ‘Kiwi’ today. Will this see a cautious mood sap NZD exchange rates?
Pound (GBP) Subdued by Political Headwinds
The Pound (GBP) suffered against its peers at the end of last week, as Sterling sentiment was suppressed by turmoil in UK politics.
Prime Minister Boris Johnson resigned on Thursday, initially lending GBP tailwinds – however, the uncertainty posed by the lack of a clear successor dented Sterling. Candidates for the position on Friday included Rishi Sunak, Liz Truss and Suella Braverman.
A lack of UK data leaves the Pound to trade on risk sentiment today, with any further political developments likely to inspire GBP movement.
Euro (EUR) Rendered Unsteady by Variable USD Strength
The Euro (EUR) traded in a mixed range on Friday as intermittent strength in the US Dollar (USD) capped gains.
A lack of EU data exposed the single currency to losses, while overall risk-off trading lent support to EUR against perceived-riskier peers but dented the currency against safe-haven assets. Policy divergence between the hawkish Federal Reserve and more measured European Central Bank (ECB) also limited Euro upside.
Today, EUR may take direction from US Dollar trading, given a lack of significant EU data.
US Dollar (USD) Supported by Non-Farm Payrolls
The US Dollar (USD) attracted tailwinds at the end of last week as June’s non-farm payroll data printed above expectations.
A bigger-than-expected increase in the number of jobs added to the US economy demonstrated that aggressive policy tightening action from the Fed has not derailed the labour market. Meanwhile, unchanged unemployment levels and overall risk-off sentiment continued to attract safe-haven support to the currency.
Tomorrow, a speech from the Fed’s John Williams could buoy USD further if he upholds the bank’s hawkish tone.
Canadian Dollar (CAD) Ticks Up on Positive Jobs Data
The Canadian Dollar (CAD) enjoyed upside on Friday as the country’s unemployment rate fell unexpectedly to 4.9% in June.
The Canadian economy also shed 43.2K jobs – but this failed to dent the ‘Loonie’ as crude oil prices lent additional support.