Australian Dollar Surges as Risk Appetite Returns to Markets

Australian Dollar (AUD) Jumps despite Downbeat Chinese Manufacturing Data

A return of global risk appetite saw the risk-sensitive Australian Dollar (AUD) soar on Monday. A rise in coal and iron ore prices lent additional support to the ‘Aussie’.

However, worse-than-expected manufacturing output for China kept some pressure on AUD.

Turning to today, the Reserve Bank of Australia (RBA) interest rate decision is in the spotlight. If the bank leaves rates unchanged, the Australian Dollar could plummet.

New Zealand Dollar (NZD) Bolstered by Return of Risk Appetite

The risk-sensitive New Zealand Dollar (NZD) also benefitted from the cheery tone yesterday.

An upbeat mood in the commodity markets added to the resource-linked currency’s upside.

A continued positive risk tone could lend NZD support today. However, the ‘Kiwi’ could suffer from its positive correlation with the ‘Aussie’ if we see an AUD selloff after the RBA decision.

Pound (GBP) Rises as BoE Rate Hike Bets Continue to Intensify

The Pound (GBP) was pushed higher by persistent Bank of England (BoE) rate hike bets on Monday, following last week’s strong UK economic data and hawkish comments from BoE Governor Andrew Bailey.

On the other hand, confirmation of a slip in March’s manufacturing sector output curbed gains for Sterling.

Movement in GBP could be affected by the BoE’s latest financial policy summary, due out overnight. Further reassurance of the UK’s financial stability could support the Pound.

Euro (EUR) Declines as Manufacturing Activity Slumps

A risk-on mood prompted a downturn in the safer Euro (EUR) yesterday.

The final reading of March’s manufacturing PMI for the Eurozone also weighed on EUR, as it confirmed a deepening downturn in factory activity.

The latest European Central Bank (ECB) consumer expectations survey could affect EUR today. Signs of easing consumer inflation expectations may dent ECB rate hike bets, thereby pressuring the Euro.

US Dollar (USD) Stumbles amid Risk-On Mood

The safe-haven US Dollar (USD) was pulled lower by a rallying market mood yesterday.

A larger-than-forecast drop in the ISM manufacturing PMI report also provoked a fall in the ‘Greenback’.

USD could face more pressure today amid a forecast decline in both JOLTs job openings and factory orders.

Canadian Dollar (CAD) Sheds Oil-Inspired Gains

The commodity-linked Canadian Dollar (CAD) climbed yesterday following a leap in oil prices. However, CAD then relinquished these gains due to its positive correlation with a weaker US Dollar and an unexpected contraction in Canada’s latest manufacturing PMI.

CAD could recover today if crude oil prices continue to rally.

Apr 4th 14:30  AUD          RBA Interest Rate Decision           3.6%

Apr 4th 18:00  EUR           ECB Consumer Expectations Survey

Apr 4th 19:00  EUR           PPI (Feb)              -0.3%

Apr 5th 00:00  USD           JOLTs Job Openings         10.4m

Apr 5th 00:00  USD           Factory Orders  -0.5%

Apr 5th 02:30  GBP           BoE Financial Policy Summary and Record


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