Australian dollar (AUD) slides following RBA Bullock remarks
The Australian dollar (AUD) fell sharply yesterday as comments from Reserve Bank of Australia (RBA) Governor Michele Bullock dampened bets on an August interest rate hike.
While Bullock said the bank would tighten policy if needed, this failed to support the ‘Aussie’. Instead, AUD investors focused on the RBA chief’s comments that the economy was cooling and the housing market was slowing more than expected.
Turning to today, Australia’s latest inflation figures are the focus for AUD investors. Signs of stubborn inflation could support the ‘Aussie’ by boosting bets on an RBA rate hike next month.
New Zealand dollar (NZD) subdued amid market concerns
The New Zealand dollar (NZD) initially trended lower yesterday as an AI stock selloff soured the market mood, although NZD found some support in European trading hours as risk appetite improved.
Looking ahead, risk sentiment is likely to be the key influence on NZD exchange rates today. If concerns about AI investment spending lead to further losses in equity markets, an anxious mood could pressure the ‘kiwi’.
Pound (GBP) unsure amid lack of data
The pound (GBP) traded without a clear direction yesterday as a lack of UK economic data left the currency rudderless.
GBP investors were also reluctant to alter their positions ahead of the Bank of England (BoE) interest rate decision tomorrow.
Sterling could remain muted today amid an ongoing lack of UK economic data and ahead of tomorrow’s BoE policy announcement.
Euro (EUR) mixed amid quiet trade
The euro (EUR) also lacked a clear directional bias yesterday, with market-moving Eurozone data absent from the calendar.
Additionally, a lack of external drivers added to EUR’s uncertain movement. An unsure market mood and wavering energy prices kept the common currency confined to a narrow range.
Eurozone data is also thin on the ground today, potentially leaving the euro to trade without a clear trajectory.
US dollar (USD) holds steady amid AI selloff
The US dollar (USD) wavered yesterday, with a mixed market mood and a lack of notable US economic releases restricting USD movement.
The safe-haven ‘greenback’ was able to hold on to recent gains, however, as concerns about an AI stock selloff kept risk appetite in check.
Market risk appetite could determine the US dollar’s direction today, although USD may be muted as traders brace for the Federal Reserve interest rate decision overnight.
Canadian dollar (CAD) edges up without clear catalyst
The Canadian dollar (CAD) ticked higher yesterday, with the crude-linked currency attracting demand despite wavering oil prices and a lack of domestic data.
With Canadian data in short supply today, oil price dynamics could drive the ‘loonie’. If peace hopes in the Middle East keep crude prices subdued, CAD could soften.
Data releases
11:30 AUD Inflation Rate (Q2)