Australian Dollar (AUD) Bolstered in Bullish Trade
The Australian Dollar (AUD) initially fell on Thursday with the release of Australia’s latest employment figures. While unemployment fell, a surprise drop in employment growth dented AUD sentiment.
However, the ‘Aussie’ was able to bounce back during the European session thanks to an uptick in market risk appetite.
A lack of data leaves AUD to trade on external factors today. If risk sentiment remains upbeat, the currency may continue to trend higher.
New Zealand Dollar (NZD) Strengthens on Risk-On Mood
The New Zealand Dollar (NZD) firmed against its peers yesterday as risk-on sentiment bolstered the currency.
Investors also appeared to have overcome Wednesday’s misgivings following the Reserve Bank of New Zealand (RBNZ)’s interest rate decision and were encouraged by comments that the bank may bring additional rate hikes forward.
Today, New Zealand’s trade balance could influence ‘Kiwi’ exchange rates, denting NZD if the country’s deficit increased last month as expected.
Pound (GBP) Comes Under Pressure as Rail Workers Strike
The Pound (GBP) wavered against its peers on Thursday, struggling to make gains as widespread strike action threatened to jeopardise economic growth.
As rail services operated at 20% capacity, experts warned that cost-of-living pressures would worsen, with two-thirds of UK households predicted to be experiencing fuel poverty by January 2023.
UK retail sales data is likely to drive Sterling movement today: if sales fell in July by more than in June, GBP may tumble.
Euro (EUR) Subdued as Energy Concerns Mount
The Euro (EUR) weakened yesterday as energy supply fears dented the single currency.
Inflation in the Eurozone printed as expected at 8.9%, but countries closer to Russia experienced more pronounced price pressures due to their exposure to Russian sanctions. In Estonia, inflation hit 22% and in Lithuania it printed at 20.5%.
Today, German PPI data could affect EUR, although the release isn’t expected to alter drastically from last month’s reading. Given the currencies’ strong negative correlation, US Dollar (USD) dynamics may also influence Euro trading.
US Dollar (USD) Gains Capped by Increased Risk Appetite
The US Dollar (USD) climbed against several peers early in the European trading session, but soon lost momentum as risk aversion faded.
Renewed risk appetite limited support for the safe-haven currency, although better-than-expected manufacturing data may have lent some tailwinds.
Overnight, USD rebounded slightly as Federal Reserve speaker Mary Daly commented that ‘we need to bridle the economy a bit, slow the pace of inflation’ – indicating further monetary policy tightening ahead.
Today, additional comments from the Fed could bolster the ‘Greenback’ if a hawkish tone is maintained.
Canadian Dollar (CAD) Trades Mixed as Oil Prices Recover
The Canadian Dollar (CAD) wavered on Thursday as an uptick in oil prices supported the ‘Loonie’ while producer price inflation missed forecasts.
Today’s retail data may weaken CAD exchange rates, as sales in June are expected to have slowed.
Data Releases
Aug 19th 08:45 NZD Balance of Trade NZ$-1500m
Aug 19th 16:00 EUR German PPI (Jul) 32%
Aug 19th 16:00 GBP Retail Sales (Jul) -0.2%
Aug 19th 22:30 CAD Retail Sales (Jun) 0.3%
Aug 19th 23:00 USD Fed Barkin Speech N/A