Australian Dollar Tumbles Following Reports China Halts Australian Coal Imports

Australian Dollar (AUD) Undermined by Chinese Coal Concerns

The Australian Dollar (AUD) initially plunged on Tuesday as Australia sought clarification on reports that China had halted Australian coal imports.

After a brief relief rally during the first half of the European trading session, this sell-off resumed with the souring of market sentiment overnight.

Looking ahead, the spotlight for AUD investors today will be on Australia’s latest consumer confidence index. Will a deterioration of household sentiment extend the ‘Aussie’s losses this morning?

Pound (GBP) Weakened by Brexit Jitters

The Pound (GBP) was placed on the defensive yesterday as reports of a lack of progress in UK-EU Brexit trade talks spooked markets.

Further denting the appeal of Sterling was the UK’s latest jobs report, which revealed domestic unemployment soared to a three-year high in August as the first wave of coronavirus redundancies struck.

Turning to today’s session, we can expect GBP exchange rates to remain highly sensitive to Brexit headlines amid the final day of negotiations ahead of tomorrow’s deadline.

Euro (EUR) Muted as Economic Sentiment Sours

The Euro (EUR) edged lower in trade on Tuesday, after the latest ZEW survey reported a sizeable drop in German economic sentiment this month.

Investor morale reportedly plunged to its lowest levels since May in response to the rise in uncertainty surrounding Europe’s coronavirus resurgence, Brexit and the US election.

Coming up today, the focus for EUR investors will be on the Eurozone’s latest industrial production figures, with a notable slowing of factory output in August likely to stoke concerns over the slowing of the bloc’s economic recovery.

US Dollar (USD) Strengthens in Risk-Off Trade

The US Dollar (USD) rallied through yesterday’s trading session as a souring of market sentiment bolstered the appeal of the safe-haven currency.

This was triggered by fresh doubts over a US stimulus package after House Speaker Nancy Pelosi told US lawmakers on Tuesday that Trump’s stimulus offer ‘falls significantly short’.

In the absence of any notable US data releases today, it’s likely the focus for USD investors will turn to the upcoming election, the uncertainty of which could stoke some fresh volatility in the US Dollar.

Canadian Dollar (CAD) Fails to Capitalise on Rebound in Oil Prices

The Canadian Dollar (CAD) continued to trade in a narrow range on Tuesday, with the commodity-linked currency seemingly unable to benefit from a convincing rebound in oil prices which propelled WTI crude back above $40 a barrel.

New Zealand Dollar (NZD) Fluctuates in Risk-Off Trade

The New Zealand Dollar (NZD) trended higher through much of yesterday’s trading session, but then failed to sustain these gains in overnight trade as market sentiment soured and investors started to favour safe-haven assets.

Data Releases

October 14th
09:30 AUD Consumer Confidence 94.5
18:00 EUR ECB Lagarde Speech
19:00 EUR Industrial Production (Aug) 0.8%

Louisa Heath