Australian dollar (AUD) fluctuates amid GDP figures and shifting mood
The Australian dollar (AUD) wavered yesterday as stronger-than-forecast GDP figures were offset by an anxious market mood.
This volatility extended into the European session as sentiment shifted, with AUD rebounding in the evening as the mood improved.
Looking ahead, Australia’s latest trade data could influence AUD. Elsewhere, market risk appetite may continue to impact the Australian dollar.
New Zealand dollar (NZD) plunges despite RBNZ rate hike
The New Zealand dollar (NZD) slumped yesterday, despite the Reserve Bank of New Zealand (RBNZ) delivering a 25-basis-point interest rate hike, as expected.
The markets interpreted the bank’s accompanying commentary as having a dovish tilt, with the RBNZ signalling that a rate increase this month reduces the likelihood for additional tightening in the future.
Turning to today, market risk appetite could drive NZD exchange rates. Could a gloomy mood see the risk-sensitive ‘kiwi’ struggle?
Pound (GBP) pressured as bond yields hit 19-year high
The pound (GBP) faced pressure yesterday as UK government borrowing costs continued to climb, with 10-year gilt yields touching their highest level since August 2007.
While bond yields soon eased off their 19-year high point, Sterling still struggled to attract support.
The UK’s final services PMI for August may underpin the pound today if it confirms that activity in the vital sector accelerated last month.
Euro (EUR) uncertain in absence of data
The euro (EUR) traded without a clear direction yesterday amid a lack of Eurozone economic data.
This left the common currency to see mixed movement against its peers, particularly amid some broader market volatility.
An expected jump in Eurozone producer price inflation in July could support EUR today, if it’s seen as further evidence of rising inflationary pressures in the bloc.
US dollar (USD) pulls back as mood improves
The safe-haven US dollar (USD) initially attracted support yesterday amid market risk aversion.
However, the US dollar retreated in the evening as market sentiment improved and the latest ADP employment change figure missed forecasts.
Overnight, the ‘greenback’ could attract support if the latest ISM services PMI reports a slight improvement in activity last month.
Canadian dollar (CAD) rebounds as BoC warns of inflation risks
Easing oil prices initially weighed on the crude-linked Canadian dollar (CAD) yesterday. However, CAD rebounded as the Bank of Canada (BoC) warned of increased upside risks to inflation as it concluded its interest rate decision.
Today, Canada’s latest services PMI could pressure the ‘loonie’ if activity contracted again in August. Elsewhere, oil price dynamics could impact CAD.
Data releases
11:30 AUD Balance of Trade (Jul)
18:00 EUR Services PMI (Aug)
18:30 GBP Services PMI (Aug)
19:00 EUR PPI (Jul)
23:30 CAD Services PMI (Aug)
00:00 USD ISM Services PMI (Aug)