Australian Dollar (AUD) Stumbles on August Employment Data
The Australian Dollar (AUD) fell against the majority of its peers yesterday as jobs data for August printed below expectations. Employment declined by 146,300 compared with market forecasts of a fall of 90,000.
Part-time employment also took a significant hit, decreasing by 78,200. According to the Australian Bureau of Statistics, falls in employment during lockdown have tended to increase as lockdowns extend beyond 4 weeks.
Looking ahead, the ‘Aussie’ may sink further as Covid woes exacerbate downside pressure. A lack of data through today’s session leaves AUD vulnerable to a souring market mood.
Pound (GBP) Goes Up on Covid Optimism
The Pound (GBP) trended up on Thursday despite a lack of UK data as Sterling sentiment rose on Covid optimism. The UK Government are on the brink of scrapping pre-departure Covid tests for international, guaranteeing quarantine-free holidays.
Investors are also optimistic over the prospect of a lockdown-free winter. The country’s winter Covid plan says vaccines are the ‘Plan A’, with face-coverings, Covid passports and working-from-home relegated to ‘Plan B’.
Looking ahead, British retail sales are expected to report a rebound in sales growth for the month of August, potentially boosting GBP.
Euro (EUR) Sinks on US Dollar Tailwinds
The Euro (EUR) struggled to climb yesterday as US Dollar strength limited upside. USD tailwinds suppressed the Euro as a result of the strong negative correlation between the two currencies.
The Eurozone balance of trade also printed with a smaller surplus than expected, suppressing trading sentiment. July’s surplus was expected to reach €30.2B, but fell short at €20.7B.
Into today’s session, Eurozone inflation seek to confirm inflation rose to a 10-year high last month If the data exceeds forecasts, investors will be hoping for a hawkish revision from the European Central Bank (ECB).
US Dollar (USD) Climbs as Sales Exceed Forecasts
The US Dollar (USD) began yesterday’s session trading high as Covid combined with international tensions drew investors towards the safe-haven currency. USD support was extended by positive retail sales – jobs data printed mixed.
August’s retail sales were expected to contract by 0.8%, but instead rose by 0.7%, bolstered by nonstore sales, furniture, general merchandise and food and beverages. Back to school shopping may have contributed towards a pickup in activity, especially given last year’s remote learning.
Data from the University of Michigan may direct USD trading into the weekend, with consumer expectation and sentiment preliminaries expected to rise for the month of September.
Canadian Dollar (CAD) Strengthens as Oil Prices Rise
The Canadian Dollar (CAD) rose against its peers yesterday as crude oil rallied, jumping to its highest level since 2 April. The ‘Loonie’ resisted downside pressure on below-forecast ADP employment data, as 39,400 jobs were created in August rather than the 180,000 expected.
New Zealand Dollar (NZD) Edges Down Despite Strong GDP
The New Zealand Dollar (NZD) fell against its peers yesterday, despite having beat GDP growth expectations in the previous session. A lack of further NZ data may have contributed towards ‘Kiwi’ downside, alongside AUD losses.
New Zealand’s business PMI may influence trading into today’s session.
Data Releases
Sep 17th 08:30 NZD Business NZ PMI (Aug) 51
Sep 17th 16:00 GBP Retail Sales (Aug) 0.5%
Sep 17th 19:00 EUR Eurozone Final Inflation Rate (Aug) 3%