Australian Dollar Pullback May Continue as Risk Appetite Cools
- Aussie Dollar underperforms amid risk aversion in overnight trade
- Euro, US Dollar unlikely to find direction in CPI and UofM reports
- Sentiment trends to remain in focus, futures hint at risk-off mood
The Australian Dollar underperformed in otherwise quiet overnight trade, with the sentiment-sensitive currency falling alongside share prices. The MSCI Asia Pacific equity index fell for a second consecutive day in a move that may reflect pre-positioning ahead of next week’s event risk.
The regional benchmark hit a two-month high mid-week. The absence of high-profile items on the docket may have inspired a round of precautionary profit-taking as investors rebalance exposure toward a more risk-neutral setting ahead of next week’s news flow, headlined by the FOMC policy announcement.
Looking ahead, the final revision of May’s German CPI figures seems unlikely to generate a significant response from the Euro considering the outcome’s limited implications for near-term ECB policy trends. A downtick on June’s University of Michigan gauge of US consumer confidence may likewise pass with little fanfare, with traders probably unwilling to commit to a directional bias on the US Dollar for now.
This leaves sentiment trends at the forefront. European and US stock index futures are pointing cautiously lower, hinting the risk-off bias may carry through in the final hours of the trading week. “Brexit”-related headline risk remains a wildcard as the fateful referendum looms ever-closer.
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|22:45||NZD||Card Spending Retail (MoM) (MAY)||-0.3%||0.5%||0.8%|
|22:45||NZD||Card Spending Total (MoM) (MAY)||-0.6%||-||1.3%|
|23:50||JPY||PPI (MoM) (MAY)||0.2%||0.1%||-0.4%|
|23:50||JPY||PPI (YoY) (MAY)||-4.2%||-4.2%||-4.2%|
|04:30||JPY||Tertiary Industry Index (MoM) (APR)||0.6%||-0.7%|
|06:00||EUR||German Wholesale Price Index (MoM) (MAY)||-||0.3%||Low|
|06:00||EUR||German Wholesale Price Index (YoY) (MAY)||-||-2.7%||Low|
|06:00||EUR||German CPI (MoM) (MAY F)||0.3%||0.3%||Medium|
|06:00||EUR||German CPI (YoY) (MAY F)||0.1%||0.1%||Medium|
|07:00||EUR||ECB's Weidmann Speaks in Eltville am Rhine||-||-||Low|
|08:30||GBP||Construction Output SA (MoM) (APR)||1.4%||-3.6%||Low|
|08:30||GBP||Construction Output SA (YoY) (APR)||-4.8%||-4.5%||Low|
|08:30||GBP||BoE/TNS Inflation Next 12 Mths (MAY)||-||1.8%||Low|
|12:15||EUR||ECB's Constancio, Lane Speak||-||-||Low|
|CCY||Supp 3||Supp 2||Supp 1||Pivot Point||Res 1||Res 2||Res 3|
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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