Australian dollar (AUD) rebounds as Middle East tensions cool
The Australian dollar (AUD) began the week under pressure as renewed conflict in the Middle East dampened global risk appetite.
However, the ‘Aussie’ staged a swift recovery as markets stabilised following Iran’s announcement that it had concluded its military operations against Israel.
Coming up, Australia’s latest consumer and business confidence indexes could weaken AUD exchange rates this morning if they report a fresh deterioration in morale.
New Zealand dollar (NZD) jumps as risk appetite improves
The New Zealand dollar (NZD) followed a similar trajectory, rallying as sentiment improved during the European trading session.
Expect the ‘kiwi’ to extend these gains today if investor risk appetite continues to strengthen.
Pound (GBP) dented by rising UK borrowing costs
The pound (GBP) struggled to gain traction at the start of this week amid a fresh rise in UK government borrowing costs.
10-year gilt yields were pushed close to 5% and struck their highest levels in over two weeks amid the risk posed by persistent inflationary pressures and rising interest rates around the globe.
In the absence of any notable UK economic indicators, movement in the pound may remain linked to UK bond market trends through today’s session.
Euro (EUR) gains capped as German factory orders slump
The euro (EUR) firmed on Monday, underpinned by its strong negative correlation with the US dollar (USD).
However, the single currency’s upside potential remained limited after data showed that German factory orders fell more than expected in April.
Turning to today’s session, Germany’s latest industrial production figures may continue to limit EUR demand if they report a similar decline.
US dollar (USD) retreats as Iran concludes offensive operations against Israel
The US dollar ultimately weakened yesterday as an easing of Middle East tensions reversed the safe-haven currency’s initial gains.
The shift in mood also prompted profit-taking in the ‘greenback’ after it enjoyed a strong rally late last week following robust US payrolls data.
Looking ahead, USD sentiment will remain sensitive to geopolitical developments, which could inject fresh volatility into the currency today.
Canadian dollar (CAD) slips as oil prices retreat
The Canadian dollar (CAD) edged lower yesterday as the initial spike in oil prices reversed following the easing of geopolitical tensions.
Meanwhile, movement in the ‘loonie’ may be limited today as CAD investors brace for the Bank of Canada’s (BoC) upcoming interest rate decision.
Data releases
10:30 AUD Consumer Confidence (Jun)
11:30 AUD Business Confidence (May)
16:00 EUR German Industrial Production (Apr)