Australian Dollar (AUD) Trends Up as NAB Business Confidence Rockets
The Australian Dollar (AUD) climbed against the majority of its peers yesterday as September’s NAB business confidence release revealed a surge in morale. The rise was driven by large shifts in confidence in NSW and Victoria, following lockdown easing and rising vaccination rates across the country.
In addition, the ‘Aussie’ benefitted from high commodity prices and spiking bond yields, driven by bets that major central banks will tighten policy to curb rising inflation.
Given a lack of market-moving data scheduled for today, AUD is likely to find movement on risk sentiment in addition to other external factors such as China’s real-estate crisis.
Pound (GBP) Rises as UK Jobs Data Impresses
The Pound (GBP) found support through Tuesday’s session as upbeat jobs data boosted GBP sentiment. The UK’s unemployment rate decreased to a one-year low in August whilst average earnings beat expectations.
Tempering these gains however were concerns that unemployment may have risen since August, after the government’s furlough scheme expired in September.
Into today, UK GDP data is likely to drive Pound dynamics: if GDP falls as per predictions of the 3-month average, investors will likely trade bearishly.
Euro (EUR) Wavers on Disappointing Data
The Euro (EUR) traded in a narrow range yesterday as economic data printed below expectations and trading sentiment wavered ahead of America’s inflation release.
The German ZEW index fell below forecasts this month, with economic sentiment printing at its lowest level since March 2020, as supply bottlenecks persist.
Eurozone industrial production figures precedes US data today – if factory output weakened as expected in August then the Euro could face additional pressure.
US Dollar (USD) Faces Headwinds, Job Openings Decline
The US Dollar (USD) traded in a mixed range on Tuesday, as ‘Greenback’s safe-haven status was unable to divert headwinds over soaring energy prices, supply chain problems and inflation jitters.
In the afternoon, JOLTs job openings data for August revealed a reduced number of vacancies – the first month of decline in the openings level since December 2020. The news may buoy trading sentiment going forward, indicating that labour shortages are waning.
Investors are likely to remain bearish, however, ahead of tomorrow’s inflation release. Consistently high inflation would encourage the Federal Reserve to stick with a tighter monetary policy outlook, while a drop could delay tapering.
Canadian Dollar (CAD) Firms despite WTI Volatility
The Canadian Dollar (CAD) lifted against the majority of its peers yesterday despite some volatility in oil prices. WTI crude wavered around $80 per barrel, down from yesterday’s highs, as risk appetite declined over higher inflation and energy price concerns.
New Zealand Dollar (NZD) Fluctuates, Supported by Commodity Prices
The New Zealand Dollar (NZD) traded in a mixed range on Tuesday as rising commodity prices supported the currency, while a lack of data exposed the ‘Kiwi’ to losses.
Buoying sentiment somewhat, New Zealand’s government reported a marked improvement in its finances, thanks to a surprisingly brisk recovery for its economy. The Reserve Bank of New Zealand (RBNZ) raised rates for the first time in seven years last week, underpinning the kiwi dollar.
Data Releases
Oct 13th 16:00 EUR German Inflation Rate Final (Sep) 4.1%
Oct 13th 16:00 GBP Industrial Production (Aug) 0.2%
Oct 13th 16:00 GBP GDP 3-Month Avg (Aug) 3%
Oct 13th 19:00 EUR Eurozone Industrial Production (Aug) -1.6%
Oct 13th 22:30 USD Inflation Rate (Sep) 4%
Oct 14th 00:30 GBP BoE Cunliffe Speech N/A
Oct 14th 04:00 USD FOMC Minutes N/A
Oct 14th 06:30 USD Fed Brainard Speech N/A