Australian dollar (AUD) wavers following RBA minutes
The Australian dollar (AUD) initially ticked lower yesterday, as hawkish minutes from the Reserve Bank of Australia’s (RBA) latest interest rate decision were overshadowed by a risk-off market mood.
However, the ‘Aussie’ was able to recoup its modest losses as sentiment improved slightly during the European session.
Looking forward, an expected cooling of Australian inflation in July could pressure AUD exchange rates today, particularly if they dampen RBA rate hike bets.
New Zealand dollar (NZD) mixed amid uncertain market mood
Demand for the New Zealand dollar (NZD) also ebbed and flowed yesterday, with NZD softening slightly before regaining ground as risk appetite shifted.
With New Zealand data thin on the ground today, market risk appetite could continue to define NZD’s direction. Could a souring mood see the ‘kiwi’ stumble?
Pound (GBP) flat amid lack of data
The pound (GBP) lacked a clear direction yesterday, as UK economic data remained in short supply.
This limited movement in Sterling, leaving GBP to trade sideways against the majority of its peers.
The Confederation of British Industry’s (CBI) latest distributive trades survey is due today. A modest improvement could lend GBP support, although any upside is likely to be limited in scope.
Euro (EUR) shored up by German data
The euro (EUR) initially dipped yesterday but reclaimed ground during European trading hours, thanks to upbeat economic data from Germany.
The country’s final GDP figures for the second quarter were revised slightly higher, while the latest IFO business climate index improved more than expected, helping EUR recover its earlier losses.
A speech from European Central Bank (ECB) policymaker Piero Cipollone could affect EUR today. However, his comments may only have a limited impact on the currency.
US dollar (USD) falters as mood improves
The US dollar (USD) attracted some safe-haven demand at the start of yesterday’s session, but soon reversed its modest gains as risk appetite improved.
Weaker-than-forecast US consumer confidence figures in the evening also failed to lift USD, as consumer morale unexpectedly deteriorated in August.
Looking ahead, the US core PCE price index – the Federal Reserve’s preferred measure of inflation – is due out today. If inflation held steady in July, USD could catch bids.
Canadian dollar (CAD) languishes amid trade tensions
The crude-linked Canadian dollar (CAD) remained on the back foot yesterday, languishing near multi-week lows against some peers, amid falling oil prices and US-Canada trade war fears.
Turning to today, the ‘loonie’ could remain under pressure if trade tensions continue to unsettle CAD investors.
Data releases
11:30 AUD Inflation Rate (Jul)
20:00 GBP CBI Distributive Trades (Aug)
20:10 EUR ECB Cipollone Speech
22:30 USD Core PCE Price Index (Jul)