Australian Dollar (AUD) Drops as Chinese Covid Levels Continue to Climb
The Australian Dollar (AUD) was pulled lower at the end of last week by a retreat in global risk appetite. A rise in China’s Covid-19 case levels also weighed on AUD.
On the other hand, AUD saw its losses limited by news that the People’s Bank of China (PBoC) would be cutting its benchmark interest rate by 25bps.
A speech by Reserve Bank of Australia (RBA) Governor could push AUD higher if she hints at further interest rate hikes today.
New Zealand Dollar (NZD) Drops amid Risk-Off Mood
The New Zealand Dollar (NZD) was pushed lower by a risk-off mood on Friday. The currency’s correlation to the Australian Dollar (AUD) also prompted losses.
Any changes in risk appetite could prompt movement in NZD today.
Pound (GBP) Firms amid BoE Rate Hike Bets
The Pound (GBP) rose against many of its rivals on Friday, although struggled against USD amid a risk-off mood. Sterling found support from persistent Bank of England (BoE) interest rate hike bets.
The announcement of further industrial action weighed on Sterling however, as well as the UK’s poor outlook.
A drop in distributive trades figures could prompt losses in the Pound today.
Euro (EUR) Gains after Upbeat German Data
The Euro (EUR) ticked higher on Friday amid risk-off mood. Better-than-forecast German consumer confidence figures and an upward revision in German GDP growth data underpinned the single currency.
EUR came under pressure from mixed comments by the European Central Bank (ECB). Mixed comments from ECB policymakers left investors uncertain regarding the central bank’s path.
With no significant data today, EUR could be affected by ECB rate hike bets and shifts in risk appetite.
US Dollar (USD) Bolstered by Retreat in Risk Appetite
The US Dollar (USD) staged a mild recovery on Friday. The safe-haven ‘Greenback’ benefitted from a risk-off mood in the markets.
On the other hand, the currency saw gains capped by bets on a slower pace of tightening from the Federal Reserve.
A speech from Fed policymaker John Williams could push USD lower later tonight if investors pick up on any dovish signals.
Canadian Dollar (CAD) Firms as Oil Prices Recover
The Canadian Dollar (CAD) edged higher on Friday amid a recovery in oil prices. Crude’s gains were capped by persistent fears over Chinese demand, however.
A downturn in Canada’s current account surplus could weigh on the currency today, as well as shifts in the price of oil.