Australian Dollar
The risk appetite generated by the week’s US presidential election debate was abating yesterday, with the Australian Dollar softening as traders sold out of the high-yield currency. The ‘Aussie’ managed to hold slight gains during the morning, however, thanks to a boost from the Chinese Westpac-MNI consumer sentiment index, which showed a sizeable rise in confidence from 111.5 to 115.2. Later, the Australian Dollar weakened after the strong US data prints.
The only Australian data on the calendar today is the low-impact job vacancies report for August.
Sterling
Despite the presence of some headwinds for Pound Sterling, the AUD/GBP exchange rate slipped into negative territory during the afternoon of yesterday’s London session. The Pound had earlier been softened by comments from the Bank of England’s (BoE) Deputy Governor, Minouche Shafik, who suggested further monetary policy easing would be necessary in the near-term. However, with markets having already priced-in an additional rate cut in November, the impact of this was muted. Later, a report from the World Economic Forum (WEF) showing that the UK had climbed to the 7th spot on the ranking of most competitive countries in the globe helped improve Pound sentiment.
UK net consumer credit and mortgage approvals figures for August will be closely watched today. Consumer credit is expected to rise, while loans for home purchases will hold roughly level according to forecasts. This could provide the Pound with further support.
Euro
A frenzy of rumours surrounding the fate of Deutsche Bank kept the Euro on a largely weak footing yesterday. In the course of a few hours the markets had heard from various sources that the government would not provide state aid, that the government was working on a rescue package and that Deutsche Bank had managed to raise €1.09 billion from the sale of its Abbey Life business. The vast levels of uncertainty surrounding how the bank could meet the fine of $14 billion levied by the US Department of Justice (DoJ) and what impact the bank’s collapse would
have upon the Eurozone kept traders weary of the Euro.
There is likely to be plenty of Euro volatility tomorrow, with key German unemployment data and the latest consumer price index for September set for release. If German CPI shows the anticipated acceleration from 0.4% to 0.6% then the Euro may well receive a substantial boost on the improved outlook for inflation in the Eurozone’s powerhouse economy.
US Dollar
After yesterday’s early positive consumer confidence result, investors had a reason to buy back into the US Dollar, helping the weakened ‘Greenback’ recover slightly. Sentiment improved even further after the latest durable goods orders report printed significantly better-than-expected. Although the figures showed no overall growth, this was better than the fall from a downwardly revised 3.6% to contraction of -1.5% expected. Considering the cut to previous growth and the stagnant pace of order didn’t exactly paint a glowing picture, however, bets of monetary tightening from the Federal Reserve were little effected.
There is a slew of medium-impact US data and developments on the calendar today. Most influential will be a series of public appearances by Federal Reserve officials, with Esther George, Patrick Harker and Dennis Lockhart all scheduled to speak at various eve nts.
Canadian Dollar
Oil was on the rise as the Organisation for the Petroleum Exporting Countries (OPEC) met to discuss potential price-boosting measures. Investors in the forex markets weren’t quite so hopeful of positive action, with several OPEC members having indicated that little would come from the meeting. Building fears of an interest rate cut from the Bank of Canada (BOC) were also weighing on the ‘Loonie’ yesterday.
Only the CFIB business barometer is set for release today.
New Zealand Dollar
Like the Australian Dollar, the New Zealand Dollar was weakened as traders withdrew from high-risk assets. The ‘Kiwi’s downtrend was far more pronounced, however, racking up significant losses versus its major peers. The strong US data also weighed on the New Zealand Dollar.
There is no New Zealand data on the economic calendar today.
Data Released
September 29th CAD CFIB Business Barometer (SEP)
September 29th 09.15 USD Fed’s George Speaks to Minority Bankers in Kansas City
September 29th 11.30 AUD Job vacancies (AUG)
September 29th 17.55 EUR German Unemployment Rate s.a. (SEP) 6.1%
September 29th 18.30 GBP Mortgage Approvals (AUG) 60.2k
September 29th 22.00 EUR German Consumer Price Index (YoY) (SEP P) 0.6%