Australian dollar (AUD) extends gains on RBA bets
The Australian dollar (AUD) maintained a bullish bias through the first half of Friday’s session as it continued to draw support from hawkish Reserve Bank of Australia (RBA) interest rate expectations.
However, the bulk of these gains were erased by the end of the session as market risk appetite was pressured by renewed demand for the US dollar (USD).
Turning to the start of this week, we expect the ‘Aussie’ to face an uphill battle as a repricing of US interest rate expectations likely continues to underpin USD demand.
New Zealand dollar (NZD) retreats as sentiment sours
The New Zealand dollar (NZD) looked to end last week’s session on positive footing, until the sudden slump in market sentiment late on Friday.
The ‘kiwi’ risks extending these gains through today’s session if investors maintain a more cautious stance.
Pound (GBP) struggles amid lack of catalyst
The pound (GBP) was muted on Friday as an ongoing lull in UK economic data, left the currency directionless.
Euro (EUR) pressured by USD strength
The euro (EUR) struggled on Friday, as it was undermined by its strong negative correlation with the US dollar.
This offset the Eurozone’s latest Economic sentiment index, which reported morale in the bloc climbed to its highest levels since the start of the year
US dollar (USD) rallies as Warsh revives September rate hike odds
The US dollar (USD) closed last week’s session on a positive note as investors seized on remarks made by Federal Reserve Chair Kevin Warsh in his Jackson Hole speech.
Warsh signalled the bank has ‘more work to do’ on inflation, reviving expectations the Fed could deliver a rate hike in September.
A key focus for USD investors today will be on the latest US employment data, as another fall in job openings could spark fresh fears that the labour market is cooling.
Canadian dollar (CAD) buoyed by rebound in GDP
A sharp acceleration in domestic GDP growth in the second quarter reflected positively on the Canadian dollar (CAD) at the end of last week, although the ‘loonie’ struggled to sustain this support amid ongoing trade jitters.