Australian dollar (AUD) firms as fading Fed bets cheer markets
The Australian dollar (AUD) rose on Thursday as a pullback in Federal Reserve interest rate hike bets buoyed the risk-sensitive ‘Aussie’.
Following the Fed decision, weaker US economic data further dampened expectations of tighter monetary policy from the American central bank.
Australia’s latest producer price index could dent AUD today, if signs of cooling factory gate inflation further dampen bets on a Reserve Bank of Australia (RBA) interest rate hike in August.
New Zealand dollar (NZD) climbs as business confidence beats forecasts
The New Zealand dollar (NZD) hit weekly highs against some rivals yesterday after New Zealand’s latest business confidence index smashed forecasts and leaped to a five-month high in July.
Turning to today, NZD could struggle after new data revealed a decline in New Zealand consumer confidence in July.
Pound (GBP) finds uneven gains amid BoE decision
The pound (GBP) was mixed yesterday, with Sterling rising against its weaker peers but facing mixed movement elsewhere, as markets responded to the Bank of England’s (BoE) interest rate decision.
While three policymakers voted to hike rates, BoE Governor Andrew Bailey said there was little evidence that inflationary pressures were becoming embedded in the UK economy.
Sterling ends the week with little in the way of UK economic data. As a result, movement in the pound may be limited.
Euro (EUR) uncertain despite strong GDP
The euro (EUR) traded without a clear trajectory yesterday, with stronger-than-forecast Eurozone GDP figures failing to boost the common currency.
EUR may have been hit by geopolitical jitters, after a Russian missile crashed in Poland.
Attention turns to the Eurozone’s latest consumer price index today. A forecast uptick in inflation in July could offer EUR modest support.
US dollar (USD) slips as data dents Fed rate hike bets
The US dollar (USD) fell on Thursday as markets continued to trim expectations for Federal Reserve rate hikes this year.
The latest US GDP figures showed that growth unexpectedly slowed in the second quarter, while June’s core PCE price index revealed cooling inflation last month.
Looking ahead, a lack of US data could leave the safe-haven ‘greenback’ to trade on market risk dynamics today. If a cautious mood prevails, USD could attempt to regain ground.
Canadian dollar (CAD) dragged lower by USD correlation
The Canadian dollar (CAD) weakened yesterday as the currency was dragged down by its positive correlation with the declining US dollar.
Canada’s latest GDP figures are in the spotlight for CAD investors today. If economic growth edged up in June, the ‘loonie’ may enjoy some support.
Data releases
08:00 NZD ANZ Roy Morgan Consumer Confidence (Jul)
11:30 AUD PPI (Q2)
19:00 EUR Inflation Rate (Jul)
22:30 CAD GDP (Jun)