Australian Dollar
Strong US data firmed bets that the US Federal Reserve would hike interest rates in December, improving the outlook for the US Dollar. This caused the Australian Dollar to slump, with the ‘Aussie’ pushed lower by the strong volatility in the commodity markets. Australian consumer confidence had also edged lower on the week.
Australian private sector credit growth is expected to have dipped in October.
Sterling
Strong UK consumer credit figures boosted the Pound following Monday’s downtrend, pressuring the AUD/GBP exchange rate lower by over -1%. The figures, which were at an eleven-year high, showed that consumers had borrowed 1.62 billion in October, more than 100 million above forecasts. Demand for home loans was also stronger than analysts had expected; over 67,500 mortgages were approved last month.
Investors will be particularly interested to read today’s Bank of England (BoE) Financial Stability Report.
Euro
The Euro was mixed yesterday, with demand for the common currency supported by volatility in the commodity markets. While the US Dollar may have firmed in response to positive domestic data, with Fed hike odds well priced in to the ‘Greenback’, the Euro found itself a more appealing safer-haven asset. The day’s data was largely disappointing, although German CPI figures printed in line with forecasts, showing that inflation remained at a steady 0.8% on the previous month.
The day ends with a slew of key Eurozone data, including the German unemployment figures and the Eurozone consumer price index estimates.
US Dollar
US consumer confidence charged higher yesterday, rising from an upwardly-revised 100.8 to 107.1; a rise to just 101.5 had been forecast. Annualised GDP for the third quarter was revised even higher, climbing to an annualised 3.2% from an earlier estimate of 2.9%, while personal consumption grew 2.8% after initial estimates of 2.1%. Fed hike bets edged up to 98.2% on the news.
There is no notable US data set for release today.
Canadian Dollar
Crude oil crashed around -4% during yesterday’s session, dragging the Canadian Dollar down versus the majority of its peers. The Iranian oil minister told reporters the country would not agree to cut production and would only abide by the cap agreed earlier in the year. With Saudi Arabia unlikely to accept a deal unless Iran is on board, it seems that the global oil oversupply is set to continue for some time.
The day’s Canadian data wasn’t supportive either; the current account deficit only managed to edge up from -CA$19 billion to -CA$18.3 billion; a narrowing to -CA$16.5 billion had been forecast.
There is no Canadian data set for release today.
New Zealand Dollar
The latest developments in the oil markets may have quashed demand for other commodity currencies, but attractive interest rates kept the New Zealand Dollar on bullish form. With the markets looking particularly unruly, many investors retreated to safer assets such as government bonds – and with central bank interest rates of 1.75%, New Zealand assets offer some of the most attractive yields of the developed nations. Investors needed ‘Kiwi’ Dollars to buy these assets, keeping the New Zealand Dollar on the rise.
Reserve Bank of New Zealand Governor Graeme Wheeler will be giving a speech later this morning.
Data Released
November 30th 11.10 NZD RBNZ’s Wheeler at Parliament Select Committee
November 30th 11.30 AUD Private Sector Credit (YoY) (OCT) 5.2%
November 30th 18.00 GBP Bank of England Publishes Financial Stability Report
November 30th 21.00 EUR Eurozone Consumer Price Index Estimate (YoY) (NOV) 0.6%