Australian Dollar (AUD) Tumbles amid Risk-Off Mood
The risk-sensitive Australian Dollar (AUD) slumped on Friday as risk appetite worsened. Tensions around the Russia-Ukraine war and the prospect of higher borrowing costs worried markets.
A poor performance in the commodities market also weighed on the resource-linked ‘Aussie’.
AUD will see no significant data releases today. Therefore, the ‘Aussie’ could be affected by any changes in market mood.
New Zealand Dollar (NZD) Slips as Risk Appetite Sours
A risk-off mood prompted losses in the New Zealand Dollar (NZD) at the end of last week.
A downbeat mood in the commodities market also weighed on the risk-sensitive ‘Kiwi’.
Looking to today, a forecast rise in fourth-quarter retail sales could boost the New Zealand Dollar.
Pound (GBP) Mixed amid Lack of Data
The Pound (GBP) was subdued on Friday amid a lack of data and the downbeat market mood, with Sterling rising against its riskier peers and stumbling elsewhere.
Bank of England (BoE) rate hike bets may have provided some support. Following the UK’s strong services PMI earlier in the week, markets continued to price in more rate increases from the BoE.
With no data for the Pound today, movement in GBP may be driven by domestic news. Hopes that the EU and UK will announce a resolution to the post-Brexit trade row in Northern Ireland may aid GBP.
Euro’s (EUR) Gains Capped by Downbeat German GDP Figures
A pullback in risk appetite bolstered the safer Euro (EUR) on Friday. Hawkish signals from the European Central Bank (ECB) also pushed EUR higher.
Poor German GDP figures capped gains for the single currency, however. The German economy shrank by 0.4% in the fourth quarter of 2022, much worse than initial estimates of a 0.2% contraction.
For the Euro today, a rise in February’s economic sentiment indicator could push EUR higher if the figures print as forecast.
US Dollar (USD) Bolstered by Evidence of Persistent Inflation
The US Dollar (USD) made strong gains at the end of last week. The safe-haven ‘Greenback’ benefitted from a risk-off market mood.
USD was also bolstered by the latest reading of the core PCE price index, the Federal Reserve’s preferred measure of inflation. Inflation unexpectedly rose last month, pointing to further interest rate hikes from the central bank.
Turning to today’s session, a forecast slump in January’s durable goods orders could weigh on USD.
Canadian Dollar (CAD) Firms Thanks to USD Correlation
The Canadian Dollar (CAD) enjoyed its positive correlation to the US Dollar on Friday. However, a drop in oil prices capped gains for the commodity-linked ‘Loonie’.
Amid a lack of market-moving data today, oil price movements may continue to impact the Canadian Dollar.
Data Calendar
Feb 27th 07:45 NZD Retail Sales (Q4) 1.7%
Feb 27th 20:00 EUR Economic Sentiment (Feb) 101
Feb 27th 23:30 USD Durable Goods Orders (Jan) -2.1%