Australian Dollar
The Australian Dollar spent Wednesday’s European session trading fairly steadily against most the majors, with AUD/USD gaining slightly after the release of mixed US data. The Australian Dollar could experience volatility later today as Australia releases trade balance and retail sales figures. At the moment the trade surplus is expected to widen and retail sales are forecast to have increased by 0.3% on the month.
Such results would be Australian Dollar supportive.
Pound Sterling
After slumping at the beginning of the week in response to less-than-impressive domestic data, Sterling stabilised on Wednesday thanks to an out-performing UK services PMI.
However, while the services index came in higher than anticipated, the Pound’s gains were minimal. The data puts Britain on track for subdued 0.3% growth in the third quarter.
Meanwhile, the Conservative party conference took a turn for the bizarre as comedian Lee Nelson presented Prime Minister Theresa May with a P45 and joked that it was on the instruction of Foreign Secretary Boris Johnson. The move did little to improve confidence in government unity. May was also pushed to sack Johnson in response to insensitive remarks related to Libya.
Euro
The Euro came under pressure on Wednesday after the Eurozone’s latest retail sales report revealed a surprising slowing in consumer spending. Sales slumped by -0.5% on the month (instead of showing the 0.3% growth anticipated) and dipped to 1.2% on the year.
As subdued retail sales could cause the European Central Bank (ECB) to rethink its plans to tighten policy in the near future, the Euro initially edged lower after the report was published. However, the common currency stabilised around the day’s opening levels before the close of the European session.
US Dollar
The US Dollar edged slightly lower overnight as the ADP employment change report showed a significantly smaller number of new positions were added in September than August. However, USD losses were limited as the final US services PMI figure was positively revised. The ISM services measure was also substantially higher than expected at 59.8 – a result which supports the argument in favour a rate hike taking place in December.
New Zealand Dollar
A dip in the price of dairy (New Zealand’s most lucrative commodity) at the latest Global Trade Dairy auction left NZD exchange rates weaker, but the commodity-driven currency recouped losses on Wednesday.
New Zealand Dollar support came in the form of New Zealand’s commodity price figure, which showed a 0.8% increase on the month in September. With economic reports for New Zealand in short supply for the rest of the week, NZD exchange rate movement is most likely to occur in response to news from the US and fluctuations in risk appetite.
Data Released
11:30 AUD Trade Balance (Australian dollar) (AUG) Medium A$870m A$460m
18:30 EUR Markit Germany Construction PMI (SEP) Medium 54.9
19:10 EUR Markit Germany Retail PMI (SEP) Medium 53
22:30 EUR ECB account of the monetary policy meeting