Australian Dollar (AUD) Enjoys Tailwinds on Bullish Border Comments
The Australian Dollar (AUD) rose against the majority of its peers on Wednesday, after Tourism Minister Dan Tehan announced that Australia plans to open its international border by Christmas at the latest.
Also boosting AUD sentiment, a risk-on mood is prevailing as Chinese real-estate giant Evergrande has promised to pay some of its debt, alleviating fears of another ‘Lehman’ moment.
Looking ahead, the Australian Dollar is likely to find direction on today’s PMI data. Manufacturing is expected to print below last month, while AU’s services PMI is set to rise: mixed data could weaken the ‘Aussie’.
Pound (GBP) Falls as US Free Trade Deal Looks Unlikely
The Pound (GBP) softened against many of its peers yesterday as UK Prime Minister Boris Johnson implied that a free trade agreement between the US and the UK is unlikely to materialise in the near-term.
Johnson was evasive when asked whether he’ll get a trade deal with America finalised by the time his term ends, replying that ‘we’re going to go as fast as we can.’ UK ministers are looking instead at joining the existing free trade agreement between the US, Mexico and Canada (USMCA).
The Bank of England (BoE)’s interest rate decision later this evening will likely be the main driver of movement for GBP.
Euro (EUR) Fluctuates Ahead of Election Day
The Euro (EUR) traded in a mixed range against its peers on Wednesday as election uncertainty weighed upon the single currency. Chancellor Angela Merkel has joined Armin Laschet, her successor at the CDU/CSU, to boost his campaign.
A Eurozone consumer confidence release in the afternoon revealed a smaller-than-expected drop in September, buoying EUR sentiment slightly: considering the EU as a whole, consumer morale rose by 1.1 points.
Into tomorrow, Euro movement will likely be affected by the latest Eurozone PMI data, with a robust expansion in the bloc’s private sector likely to buoy the Euro.
US Dollar (USD) Mixed On Approaching Fed Decision
The US Dollar fluctuated against its peers yesterday as sentiment wavered ahead of the Federal Reserve’s interest rate decision. Various banks concurred that the Fed was unlikely to signal imminent tapering.
A risk-on market sentiment capped gains, as Chinese real-estate company Evergrande pledged it will pay off some of its debt. The announcement reassured investors, who had feared of another ‘Lehman moment’.
Further movement in the ‘Greenback’ is likely to be driven by markets’ response to Fed Chairman Jerome Powell’s tone at the press conference. If his message is interpreted with a dovish bias, USD sentiment will likely decline.
Canadian Dollar (CAD) Firms as Oil Prices Rise
The Canadian Dollar (CAD) rose yesterday as oil prices lifted. Crude oil prices built on modest overnight gains and rallied around 1.5% amid signs of tight supply and improving demand.
Canadian retail sales today could direct further movement, although oil prices are likely to remain the key driver. Sales are estimated to have fallen for the month of July, potentially exerting headwinds.
New Zealand Dollar (NZD) Edges Up on Chinese Optimism, AUD Strength
The New Zealand Dollar (NZD) saw gains through yesterday’s session as Evergrande concerns abated. As New Zealand’s biggest trading partner, threats to the Chinese economy can also dent NZD sentiment.
Data Releases
Sep 23rd 09:00 AUD Markit Manufacturing PMI Flash (Sep) 51
Sep 23rd 09:00 AUD Markit Services PMI Flash (Sep) 44
Sep 23rd 18:00 EUR Eurozone Markit Manufacturing PMI Flash (Sep) 60.3
Sep 23rd 18:00 EUR Eurozone Markit Services PMI Flash (Sep) 58.5
Sep 23rd 18:30 GBP Markit/CIPS Manufacturing PMI Flash (Sep) 59
Sep 23rd 18:30 GBP Markit/CIPS UK Services PMI Flash (Sep) 55
Sep 23rd 21:00 GBP BoE Interest Rate Decision 0.1%
Sep 23rd 22:30 CAD Retail Sales (Jul) -1.2%
Sep 23rd 22:30 USD Initial Jobless Claims (Spe) 320K
Sep 23rd 23:45 USD Markit Manufacturing PMI Flash (Sep) 61.5
Sep23rd 23:45 USD Markit Services PMI Flash 55