Australian Dollar (AUD) Weakens in Risk-Off Trade
The Australian Dollar (AUD) was placed on the defensive through yesterday’s trading session, as a prevailing risk-off mood sapped demand for the ‘Aussie’.
The cautious mood came amidst growing concern over the worldwide spread of the Delta variant of the coronavirus and its potential impact on the global economic recovery.
An absence of economic data from Australia could see AUD exchange rates susceptible to further losses today, if the mood continues to sour.
Pound (GBP) Dips amid Tax and Brexit Concerns
The Pound (GBP) found little support on Wednesday as the appeal of the currency continued to be suppressed by the recent announcement that the UK government is seeking to increase national insurance contributions.
Also limiting the appeal of Sterling were ongoing Brexit concerns, after the topic was thrust back into the spotlight earlier this week following the government’s moves to extend the grace period on Irish Sea border checks.
These issues could continue to undermine the Pound through today’s session as UK data releases remain thin on the ground.
Euro (EUR) Loses Traction ahead of ECB Rate Decision
The Euro (EUR) softened yesterday in the face of some mixed messages from European Central Bank (ECB) policymakers ahead of the bank’s latest interest rate decision.
Whilst the ECB’s Robert Holzmann suggested the bank could start to ‘normalise monetary policy sooner than most financial market experts expect’, his colleague Bostjan Vasle struck a more cautious tone, suggesting that a ‘highly accommodative’ monetary policy is still needed.
The ECB’s rate decision will undoubtedly act as the main catalyst of movement in the Euro later today. Will a dovish statement from the bank send the Euro lower again?
US Dollar (USD) Bolstered by Cautious Mood
The US Dollar (USD) trended higher on Wednesday, with the safe-haven currency attracting support amidst a more bearish market mood.
This upside in the ‘Greenback’ was further reinforced by the latest JOLTs job opening figures, after they soared to a new record high in July.
Overnight the latest initial US jobless claims could extend the US Dollar’s upward momentum, assuming that new claims continued to fall last week.
Canadian Dollar (CAD) Muted as BoC Leaves Monetary Policy Untouched
The Canadian Dollar (CAD) traded in a narrow range overnight on Wednesday as the Bank of Canada (BoC) concluded its latest policy meeting, by opting to leave its policy untouched, whilst also cautioning about ongoing economic uncertainty.
New Zealand Dollar (NZD) Weakens on back of Risk-Off Trade
The New Zealand Dollar (NZD) slipped lower across the board yesterday, in response to a weakening market mood.
Data Releases
9th Sep 16:00 EUR German Trade Balance (Jul) €21.1bn
9th Sep 21:45 EUR ECB Interest Rate Decision 0%
9th Sep 22:30 USD Initial Jobless Claims (4/Sep) 335,000