Australian Dollar
Confidence in the ‘Aussie’ failed to pick up on Thursday as a lack of domestic data continued to weigh on the antipodean currency. A speech from Reserve Bank of Australia (RBA) deputy governor Guy Debelle did not offer the Australian Dollar any particular support, with the policymaker not giving any particular comments on the policy outlook. This left AUD exchange rates biased to the downside, even as global geopolitical tensions did not show any fresh signs of escalation.
An uptick in Australian private sector credit could bolster the appeal of the antipodean currency, though, as this would offer evidence of greater resilience within the domestic economy.
Sterling
Although EU chief negotiator Michel Barnier indicated that Brexit talks could still be months away from progressing to the next stage this was not enough to keep the Pound on a bearish footing. Investors were instead encouraged by indications that the two sides are beginning to make some progress towards agreement on key issues, even though signs still point towards a distinct gap between the UK and EU positions. Nevertheless, the uncertainty of Brexit is still likely to limit the upside potential of Sterling for some time to come.
Tonight’s raft of UK data could also provoke fresh volatility for GBP exchange rates, particularly if the latest net consumer credit figure points towards a further increase in household debt.
Euro
The single currency found a rallying point on the back of a solid uptick in the Eurozone economic confidence index, which suggested that the currency union is in a more optimistic mood. A steady German consumer price index added to the appeal of the Euro, although a lack of acceleration in inflation is likely to encourage the European Central Bank (ECB) to adopt a less hawkish outlook. Even so, as the initial negative impact of the German election continued to fade demand for the Euro recovered.
If the German unemployment rate remains at its 27-year low this could offer a further boost to the single currency.
US Dollar
A surprise upwards revision to the annualised second quarter US gross domestic product was not enough to extend the bullish run of the ‘Greenback’. Even though August’s advance goods trade balance figure also bettered forecasts the US Dollar was unable to maintain its earlier traction against rivals. As the likelihood of the Trump administration delivering on its promised tax reforms remains somewhat limited USD exchange rates returned to a downtrend, also suffering from technical resistance.
Unless August’s US personal consumption expenditure core indicates a fresh uptick in inflationary pressure then the ‘Greenback’ is unlikely to see a rally tonight.
Canadian Dollar
As investors were discouraged by the dovishness of Bank of Canada (BOC) Governor Stephen Poloz’s latest speech the ‘Loonie’ slumped sharply. With the odds of any further BOC interest rate hikes looking distinctly limited the appeal of the Canadian Dollar weakened. However, as oil prices remained buoyant this helped to keep the ‘Loonie’ on a stronger footing against its commodity-correlated rivals at least.
If tonight’s Canadian gross domestic product data indicates a loss of momentum within the economy this could prompt further losses for CAD exchange rates.
New Zealand Dollar
While markets had not anticipated any action from the Reserve Bank of New Zealand (RBNZ) at its September meeting investors were still disappointed by the more dovish nature of the accompanying comments. As the central bank does not look likely to return to a monetary tightening bias any time soon there was little reason to favour the ‘Kiwi’ yesterday. Persistent political jitters also weighed on NZD exchange rates.
With no fresh domestic data set for release today the New Zealand Dollar is likely to struggle to find any particular support.
Data Released
September 29th 09:01 GBP GfK Consumer Confidence Survey (SEP) -11
September 29th 11:30 AUD Private Sector Credit (YoY) (AUG) 5.5%
September 29th 17:55 EUR German Unemployment Rate (SEP) 5.7%
September 29th 18:30 GBP Net Consumer Credit (AUG) 1.4 billion
September 29th 22:30 CAD Gross Domestic Product (YoY) (JUL) 3.9%
September 29th 22:30 USD Personal Consumption Expenditure Core (YoY) (AUG) 1.4%