Australian dollar (AUD) firms amid rebound in exports
The Australian dollar (AUD) appreciated on Thursday as Australia’s latest trade data surprised to the upside.
Australia recorded a AU$1.79bn trade surplus in April, rebounding from a AU$1.02bn deficit in March as exports saw their strongest growth in three years.
Looking ahead, movement in AUD through the end of the week is likely to be linked to market risk dynamics, with the ‘Aussie’ potentially firming if the mood remains broadly positive.
New Zealand dollar (NZD) bolstered by RBNZ rate hike bets
The New Zealand dollar (NZD) also rallied yesterday as investors continued to price in future interest rate hikes from the Reserve Bank of New Zealand (RBNZ).
NZD data is in short supply today, but the ‘kiwi’ may be able to maintain a positive trajectory if market sentiment continues to improve.
Pound (GBP) muted in quiet trade
The pound (GBP) was confined to a narrow range on Thursday amid the absence of any notable UK economic indicators.
Movement in the UK bond market was also largely flat, further limiting trade impetus for Sterling.
UK data remains thin on the ground today, which may leave the pound directionless through the remainder of the week.
Euro (EUR) gains capped by weak retail sales
The euro (EUR) strengthened on Thursday, supported by its strong negative correlation with the US dollar (USD).
However, the single currency’s gains remained modest as a result of weaker-than-forecast Eurozone retail sales data.
Coming up, the Eurozone’s latest GDP figures are expected to confirm that growth in the bloc slowed to a crawl in the first quarter of the year and could limit the euro’s upside potential today.
US dollar (USD) slips as risk sentiment improves
The US dollar stumbled yesterday as a positive shift in risk appetite limited demand for the safe-haven currency.
Investors turned cautiously optimistic on hopes that a new ceasefire agreement between Israel and Lebanon could help to kick-start wider US-Iran peace negotiations.
In the spotlight today will be the latest US payroll print. Continued resilience in the US labour market last month is likely to boost hawkish Federal Reserve bets and could see the US dollar end the week on a high note.
Canadian dollar (CAD) tracks oil prices lower
The Canadian dollar (CAD) retreated on Thursday as a softening of oil prices limited the appeal of the commodity-linked currency.
Canada will also publish its latest jobs report today, with the ‘loonie’ poised to weaken if the labour market continued to slow last month.
Data Releases
19:00 EUR GDP (Q1)
22:30 CAD Unemployment Rate (May)
22:30 USD Non-Farm Payrolls (May)