Today’s Notable Sentiment ShiftsAUD – The Australian dollar hit a one-year high against the euro on Wednesday as investors were attracted by Australia’s status as a net energy exporter and distance form Europe’s troubles.
Explaining Australia’s improving outlook, RBC Capital Markets notes that “a strong household balance sheet with scope for consumption to move back to its pre-COVID path, backlog of dwelling activity, and recovering confidence underpins our expectation for a strong 2022 and above trend growth.”
CAD – The Canadian dollar rose across the board as the Bank of Canada hiked interest rates for the first time since October 2018 despite recent financial market volatility due to the crisis in Ukraine.
Indeed, Convera Canada ULC noted that “there was a good deal of uncertainty as to how they would respond to the geopolitical events and they stuck to their knitting pretty firmly.” Adding that the BoC’s concern about inflation pressures did a lot “to cement expectations for future interest rate hikes.”
