Australian Dollar (AUD) Slides as Fed Minutes Sour Market Sentiment
The Australian Dollar (AUD) suffered losses during Thursday’s session after the latest Federal Open Market Committee (FOMC) monetary policy minutes drove traders to the safe-haven US Dollar.
While the Fed’s minutes were vague, the US central bank warned of high uncertainty over growth prospects which was enough to dent risk appetite and weigh on the ‘Aussie’.
Looking ahead, the Australian Dollar could slide further following the latest flash CommBank PMI surveys which are expected to show slowing growth in the services and manufacturing sectors in August.
Pound (GBP) Slips Toward One-Week Low
The Pound (GBP) briefly fell towards a one-week low during Thursday’s session after monetary policy minutes from the Federal Reserve were less dovish than forecast which caused bears to buy into the US Dollar.
Meanwhile, Brexit talks remain in focus and analysts have noted that while London has reiterated it still hopes to achieve a deal, with little progress so far, the time left to strike a deal looks limited.
The British currency could make some gains today if the latest flash PMI surveys impress markets and show both the services and manufacturing sectors expanded more than expected in August.
Euro (EUR) Mixed as ECB Offers Slightly More Optimistic View
The Euro (EUR) suffered losses but made gains against riskier assets such as the ‘Aussie’ and ‘Kiwi’ as risk appetite fell. EUR remained under pressure as countries across the Eurozone reported growing numbers of coronavirus cases, with Germany recording its highest daily increase since April.
Meanwhile, the latest European Central Bank (ECB) meeting account showed that policymakers debated the extent of their flexibility in making emergency bond purchases. While the minutes offered a slightly more optimistic view on the bloc’s growth, the bank noted it’s likely to use up all its approved firepower to help tackle the coronavirus pandemic.
The single currency could edge lower during today’s session if the latest flash PMI surveys from across the bloc reveal growth expanded at a slower pace in August.
US Dollar (USD) Struggles as Jobless Claims Jump Over One Million Again
The US Dollar (USD) made gains against riskier assets but struggled against other currencies after the latest data revealed initial weekly jobless claims jumped back over one million.
The number of Americans filing claims for unemployment benefits unexpectedly jumped back above the one million mark in another setback for the country’s struggling job market. This followed previous data which marked the first time since March that new jobless claims registered below the one million level.
Looking ahead, the Dollar could edge higher if the latest round of flash PMIs reveal activity in the US services and manufacturing sectors has continued expanding in August.
Canadian Dollar (CAD) Rises despite Cautious OPEC+
The Canadian Dollar (CAD) was able to make some gains during Thursday’s session despite data revealing oil prices fell on Thursday. Demand concerns surged after a cautious OPEC+ meeting and the latest FOMC minutes as traders worried about the recovery from the coronavirus pandemic.
The ‘Loonie’ received some support after the latest ADP Employment Change revealed 1,149,800 jobs were added to the economy in June.
CAD could edge higher during today’s session if the latest retail sales data shows sales surged in June.
New Zealand Dollar (NZD) Tumbles as Risk Appetite Falls
The New Zealand Dollar (NZD) slumped during Thursday’s session as risk appetite declined following the latest Federal Reserve monetary policy minutes.
Looking ahead, due to a lack of domestic data, it is likely the ‘Kiwi’ will continue to react to geopolitical factors. If risk appetite declines further as coronavirus cases around the world continue to rise, it will send NZD lower.
Upcoming Data
09:00 AUD Flash CommBank Manufacturing PMI (Aug) 53.5
09:00 AUD Flash CommBank Services PMI (Aug) 57.7
09:01 GBP GfK Consumer Confidence (Aug) -24
16:00 GBP Retail Sales (Jul) 2.5%
18:00 EUR Markit Flash Manufacturing PMI (Aug) 52.6
18:00 EUR Markit Flash Services PMI (Aug) 54
18:30 GBP Markit Flash Manufacturing PMI (Aug) 53.4
18:30 GBP Markit Flash Services PMI (Aug) 57.4
22:30 CAD Retail Sales (Jun) 24.5%
23:45 USD Markit Flash Manufacturing PMI (Aug) 52
23:45 USD Markit Flash Services PMI (Aug) 51.5