Australian Dollar (AUD) Ticks Higher on Chinese Stimulus Hopes
The Australian Dollar (AUD) found renewed strength yesterday as risk appetite improved. Hopes of further economic stimulus measures in China buoyed investors.
However, preventing further gains was the mounting expectation that the Reserve Bank of Australia (RBA) will keep interest rates unchanged in September.
Looking ahead, both the manufacturing and services PMIs are expected to improve in August, which could boost the ‘Aussie’ further. The former is predicted to return to expansion territory for the first time since February, hinting at a recovering economy.
New Zealand Dollar (NZD) Climbs as Risk Appetite Improves
The New Zealand Dollar (NZD) rose in tandem with the ‘Aussie’ yesterday, managing to find support amid an upbeat market mood.
Hopes that China, the world’s second-largest economy, would take steps to boost growth cheered markets, lifting the risk-sensitive ‘Kiwi’.
However, the latest retail sales figures could pour cold water on yesterday’s positivity today. A third consecutive quarterly decline in retail sales could weigh on the New Zealand Dollar.
Pound (GBP) Subdued amid Economic Jitters
The Pound (GBP) remained under pressure yesterday as recession woes offset expectations of further interest rate increases from the Bank of England (BoE).
Amid a lack of economic data, GBP investors remained perturbed by the fragility of the UK economy.
Turning to this evening, the latest PMI figures could sink the Pound further as both the manufacturing and service sectors are expected to have weakened in August.
Euro (EUR) Under Pressure from Stuttering German Economy
The Euro (EUR) fell yesterday amid ongoing concerns around the health of the Eurozone’s largest economy, Germany.
The Bundesbank warned that the German economy is likely to stagnate in the third quarter of this year, following two quarters of contraction.
Turning to today, the PMIs for the Eurozone will be in focus. With both manufacturing and service-sector activity expected to weaken, the single currency could remain under pressure.
US Dollar (USD) Fluctuates amid Risk-On Trade
The US Dollar (USD) faced mixed movement against its rivals on Tuesday, initially declining as the risk-on mood dampened the safe-haven currency’s appeal.
Some slightly hawkish comments from Federal Reserve officials helped USD recover in later trade, with the ‘Greenback’ gaining against its weaker rivals.
This evening will see the latest manufacturing and services PMI data released. With the US expected to outperform the UK and the Eurozone, the ‘Greenback’ could find some support.
Canadian Dollar (CAD) Trades Erratically amid Volatile Oil Prices
The commodity-linked Canadian Dollar (CAD) failed to find a clear direction on Tuesday as WTI crude prices fluctuated wildly.
Looking ahead, the latest retail sales figures could weigh on the ‘Loonie’ if forecasts of a stagnation in June prove accurate.
Data Releases
Aug 23rd 08:45 NZD Retail Sales QoQ (Q2) -2.6%
Aug 23rd 09:00 AUD Manufacturing PMI (Aug) 50.1
Aug 23rd 09:00 AUD Services PMI (Aug) 48.5
Aug 23rd 18:00 EUR Manufacturing PMI (Aug) 42.6
Aug 23rd 18:00 EUR Services PMI (Aug) 50.5
Aug 23rd 18:30 GBP Services PMI (Aug) 51
Aug 23rd 18:30 GBP Manufacturing PMI (Aug) 45
Aug 23rd 22:30 CAD Retail Sales MoM (Jun) 0%
Aug 23rd 23:45 USD Manufacturing PMI (Aug) 49.3
Aug 23rd 23:45 USD Services PMI (Aug) 52.2