Australian Dollar (AUD) Falls in Upbeat Trade
The Australian Dollar (AUD) got off to a poor start this week as investors shunned the risk-sensitive ‘Aussie’ as a bearish bias prevailed.
This souring of the market mood appeared driven by both setbacks to US stimulus talks and growing worries over the global economic impact of coronavirus as a second wave of cases threatens to put some countries back into lockdown.
Turning to today’s session, the focus for AUD investors will be on the latest Chinese trade figures. Will a rebound in Chinese exports help to bolster the Australian Dollar?
Pound (GBP) Gains Despite New Coronavirus Restrictions
The Pound (GBP) struggled to find direction through the first half of yesterday’s trading session as investors were reluctant to make any aggressive bets as the UK government geared up to announce new coronavirus restrictions.
However, the announcement ultimately lead to a modest uptick in Sterling after Boris Johnson announced that most areas would avoid the strictest measures for now.
Coming up in today’s European session, we will see the publication of the UK’s latest employment figures likely report a rise in the unemployment rate and another fall in wage growth in August. But will the impact on Sterling prove limited as GBP investors are preoccupied by the impending Brexit deadline?
Euro (EUR) Undermined by Coronavirus Worries
The Euro (EUR) was on the back foot on Monday as countries in Europe look to implement stricter restrictions while coronavirus cases on the continent skyrocket.
This in turn is fuelling concerns over the Eurozone’s economic rebound as analysts warn that further restraints will further derail the bloc’s already fragile recovery.
EUR investors will be eager to see if this mood is reflected in the latest ZEW surveys, with concerns that part of the Eurozone could be forced back into lockdown potentially resulting in a deterioration in sentiment in the bloc this month.
US Dollar (USD) Firms Following US Stimulus Setback
The US Dollar (USD) edged higher at the start of this week’s session as House Speaker Nancy Pelosi’s rejection of the Trump administration’s latest stimulus proposal over the weekend soured the market mood.
However, the ‘Greenback’ struggled to really capitalise on the risk-off tone as a US holiday and closure of domestic markets resulted in thin trading conditions in the US Dollar.
In overnight trade, the focus for USD investors will be on the US consumer price index. Will another bump in inflation last month offer some support to the US Dollar later this afternoon?
Canadian Dollar (CAD) Stalls as Oil Prices Fall
The Canadian Dollar (CAD) was stuck in a narrow range through Monday’s trading session as US oil prices slipped back below $40 a barrel, undermining the appeal of the commodity-linked ‘Loonie’.
New Zealand Dollar (NZD) Dips in Risk-Off Trade
The New Zealand Dollar (NZD) opened this week’s session on the back foot as some market pessimism undermined demand for the risk-sensitive currency.
Also exerting pressure on the ‘Kiwi’ were concerns over the impending NZ election, the uncertainty surrounding which is likely to stoke volatility in NZD throughout the remainder of the week.
16:00 GBP Unemployment Rate (Aug) 4.3%
16:00 GBP Wage Growth (Aug) -0.6%
19:00 EUR ZEW Economic Sentiment Index (Oct) 73
22:30 USD Inflation Rate (Sep) 1.4%