Strong Investor Sentiment Toward The Euro Continues (EUR/USD), EUR/GBP Currency Pair, As China Ease Lockdowns The AUD Outlook Seems Positive (GBP/AUD, AUD/USD)
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Summary:
- Expectations for the ECB to raise interest rates grow.
- GBP doing well in the wake of HM Treasury’s Thursday announcement of the stimulus package.
- As China eases lockdowns, the AUD strengthens.
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Euro still gaining on the US Dollar
Market sentiment for this currency pair is reflecting bullish signals. The current combination of a strong Euro and a weak US Dollar is giving room for the Euro to bounce back to a level almost equal to that of 5 weeks ago. The market expectations for the European Central Bank (ECB) to raise interest rates have been growing over the past few weeks, whilst the expectations for the US Dollar have weakened as market price out some of the Feds hawkish decisions.
EUR/USD Price Chart
Market sentiment toward the Pound Sterling remains strong
Market sentiment for this currency pair is reflecting bearish signals. On Tuesday, Eurostat is expected to release their estimate for May inflation, which could have an impact on the Euro. The move made late last week by HM treasury to implement a stimulus package to struggling households has the markets favouring the Pound Sterling over the EURO.
EUR/GBP Price Chart
Australian Dollar benefitting from the opening Chinese economy
The Australian Dollar is performing well against the Pound Sterling amidst China continuing with the phased re-opening of the economy in the wake of its most recent Covid-19 lockdowns. It is well known that what is good for the Chinese economy is normally good for the Australian Dollar. If the global economic outlook continues to improve (especially in China), the AUD could outperform.
GBP/AUD Price Chart
AUD/USD reflecting mixed market signals
The market is reflecting mixed market sentiment signals. The Australian Dollar is strengthening as the Chinese economy outlook seems positive in conjunction with the weakening US Dollar, giving the AUD a chance to strengthen against the USD.
AUD/USD Price Chart
Sources: finance.yahoo.com, dailyfx.com
