Australian dollar (AUD) dented by Chinese inflation data
The Australian dollar (AUD) got off to a poor start this week, following the publication of China’s latest inflation figures over the weekend.
Sunday’s data reported prices fell month-on-month in July, reviving concerns about deflationary pressures in Australia’s largest export market.
Looking ahead, the ‘Aussie’ may remain under pressure today if the Reserve Bank of Australia (RBA) keeps interest rates on hold and strikes a cautious tone following its August policy meeting.
New Zealand dollar (NZD) undermined by cautious trade
The New Zealand dollar (NZD) was also subdued on Monday, as a cautious mood limited the appeal of the risk-sensitive currency.
The ‘kiwi’ is likely to extend these losses through today’s session unless we see a marked improvement in sentiment.
Pound (GBP) rallies despite limited economic indicators
The pound (GBP) trended broadly higher through yesterday’s session, rising just shy of a two-week high.
However, there was no clear catalyst for Sterling’s gains, amid a continued drought of UK economic data ahead of Thursday’s GDP figures.
It remains to be seen if the pound can maintain this momentum through Tuesday’s session amid the continued lull in data.
Euro (EUR) flat in quiet trade
The euro (EUR) was muted on Monday as a break in Eurozone data left the single currency without a clear directional bias.
Further subduing EUR demand was its inverse trade relationship with the US dollar (USD) amid a modest uptick in the latter currency.
Eurozone economic data remains thin on the ground today, leaving the euro at the mercy of broader currency market trends.
US dollar (USD) buoyed by Middle East uncertainty
The US dollar edged higher on Monday, as fading hopes for an imminent US-Iran ceasefire bolstered safe-haven demand.
However, these gains were ultimately capped as the ‘greenback’ continued to feel the fallout from Friday’s abysmal payroll print.
Looking ahead, the US dollar may trade sideways today ahead of the currency’s next key test, Wednesday’s inflation data.
Canadian dollar (CAD) supported by rising oil prices
The Canadian dollar (CAD) traded with modest support yesterday as Brent oil prices rose back above $85 per barrel.
The commodity-linked ‘loonie’ is likely to remain sensitive to oil price dynamics through Tuesday’s session, with further gains likely if crude continues to rise.
Data Releases
11:30 AUD Business Confidence (Jul)
14:30 AUD RBA Interest Rate Decision
22:15 USD ADP Employment Change