Australian Dollar Rallies in Upbeat Trade

Australian Dollar (AUD) Gains in Upbeat Trade

The Australian Dollar (AUD) struck higher on Thursday as an improvement in market sentiment boosted the appeal of the risk-sensitive currency.

This rally in the ‘Aussie’ was further supported by the ANZ business confidence index, which showed a marked improvement in October.

Turning to today’s session, the focus for AUD investors will be on the Reserve Bank of Australia’s (RBA) latest financial stability review as they look for any additional guidance on the likely path of interest rates.


Pound (GBP) Dips on BoE Comments

The Pound (GBP) trended lower through yesterday’s trading session following comments from Bank of England Governor (BoE) Andrew Bailey.

Speaking at an online webinar hosted by the European Commission, Bailey warned that the risks to the UK’s recovery are ‘very much on the downside’ due to ‘unprecedented uncertainty’ from the coronavirus pandemic.

Further limiting the appeal of Sterling on Thursday were ongoing concerns over Brexit as headlines suggested the UK and EU remain deadlocked on a small number of key issues in trade talks.

Potentially offering the Pound a break from Brexit today will be the UK’s latest monthly GDP release. Will a rebound in growth in the three months to August offer some support to Sterling?


Euro (EUR) Muted as ECB Minutes Highlight Inflation Concerns

The Euro (EUR) was on the back foot on Thursday in response to the minutes from the European Central Bank’s (ECB) September policy meeting.

These highlighted the ECB’s concerns over the lack of inflationary pressure in the Eurozone, with members in agreement that ‘ample stimulus remains necessary’.

In the absence of any notable Eurozone data releases today, the focus for EUR investors is likely to turn back to Europe’s fight against the coronavirus, potentially leading to some weakness in the single currency as the second wave shows no signs of slowing.


US Dollar (USD) Flat as US Jobless Claims Disappoint

The US Dollar (USD) was mostly directionless through yesterday’s trading session after the latest US jobless claims printed above expectations.

An increase of 840,000 last week stokes concerns over a lack of progress in the US labour market, with jobless claims having almost completely stalled since mid-August.

Looking ahead, a lull in USD data today will likely see US election uncertainty potentially stir up some volatility in the US Dollar ahead of the weekend.


Canadian Dollar (CAD) Buoyed by Uptick in Oil Prices

The Canadian Dollar (CAD) trended higher on Thursday, with the commodity-linked currency appreciating in line with a 2% jump in oil prices.

Coming up today, the ‘Loonie’ could attempt to extend its recent gains if Canada’s latest jobs figures report that the unemployment rate fell below 10% last month.


New Zealand Dollar (NZD) Tumbles as RBNZ Official Discusses Negative Interest Rates

The New Zealand Dollar (NZD) fell back in overnight trade, retreating in response to comments from the Reserve Bank of New Zealand’s (RBNZ) Christian Hawkesby in which he dropped further hints that the bank seeks to implement negative interest rates.

However the ‘Kiwi’ clawed back much of these later in the session following an improvement in market sentiment.


Data Releases

October 9th

10:30 AUD RBA Financial Stability Review

16:00 GBP GDP (Aug) 4.6%

16:00 GBP Industrial Production (Aug) 2.5%

16:00 GBP Trade Balance (Aug) £0.6bn

22:30 CAD Unemployment Rate (Sep) 9.7%

Louisa Heath