Australian Dollar
As expected, the Reserve Bank of Australia (RBA) left interest rates unchanged at its latest policy meeting. While the accompanying policy statement was fairly upbeat on the subject of the domestic economy, the references to the growth in household debt were enough to inspire some modest AUD losses. If today’s AiG performance of services index shows improvement, the Australian Dollar could strengthen in the hours ahead. The measure came in at 53 in August. The UK’s own services PMI is also likely to inspire movement in the AUD/GBP exchange rate.
Pound Sterling
Sterling’s bad week continued during Tuesday’s European session, with UK political concerns and a poor UK construction PMI sending the Pound reeling. GBP/AUD briefly hit a low of $1.6917. Given that Britain’s services sector accounts for over 70% of total economic output, the pound is likely to fall further if today’s highly influential UK services PMI completes a trio of below-forecast British ecostats. Economists have estimated that the gauge held at 53.2 in September, but their predictions haven’t proven accurate so far. The UK BRC shop priced index for September will also be of interest.
Euro
The AUD/EUR exchange rate dipped by around 0.3% during the local session as the Euro stood firm following the release of a better-than-forecast producer price index for the Eurozone. Producer prices came in at 0.3% on the month (vs. forecasts for a reading of 0.1%) and 2.5% on the year (rather than the 2.3% expected.)
Final services and composite PMIs for the Eurozone and its largest economies are set for publication today. An improvement in initial estimates would be Euro-positive. The Eurozone’s retail sales figures will be the day’s main Euro movers however. Consumer spending is predicted to have increased by 0.3% on the month in August (making up for July’s -0.3% slump) and 2.6% on the year. Upbeat spending figures would support the case for tighter monetary policy in the Eurozone and lend the common currency support.
US Dollar
Although the AUD/USD exchange rate fluctuated modestly following the RBA interest rate decision, a lack of influential US data meant that the pairing soon returned to trending in a fairly narrow range. Today’s US ADP employment change number for September may leave the US Dollar weaker if it shows the anticipated decline in new positions.
New Zealand Dollar
A 2.4% decline in the overall price index at the latest Global Dairy Trade Auction in New Zealand left the New Zealand Dollar weaker against its most traded currency rivals. This was the largest drop in dairy prices recorded since March. AUD/NZD climbed by 0.5% following the auction. Upcoming NZ data includes the nation’s commodity price index for September. The measure fell by -0.8% in August.
Data Released
09:30 AUD AiG Performance of Service Index (SEP)
19:30 GBP Markit/CIPS UK Services PMI (SEP)
19:30 GBP Markit/CIPS UK Composite PMI (SEP)
20:00 EUR Euro-Zone Retail Sales (YoY) (AUG)
22:00 USD MBA Mortgage Applications (SEP 29)
23:15 USD ADP Employment Change (SEP)