Australian Dollar (AUD) Firms as Employment Data Exceeds Expectations
The Australian Dollar (AUD) found support against its peers yesterday, as full time jobs increased. While domestic unemployment rose from 4.5% to 4.6%, it beats forecasts the jobless rate would rise to 4.8%.
Gains were capped somewhat as concerns over China’s economy, following a weaker-than-expected Chinese inflation reading.
A lack of data today exposes the Australian Dollar to losses – if concerns over China persist, AUD may come under pressure.
Pound (GBP) Rises on GDP Optimism, Brexit Progress
The Pound (GBP) was bolstered on Thursday as GDP data from the previous session continued to lend support. The UK economy grew by 0.4% in August, rebounding from July’s 0.1% contraction.
Also boosting GBP, the EU extended a generous proposal yesterday regarding the Northern Ireland protocol. The EU’s ambassador to the UK, João Vale de Almeida, described the plan as ‘unprecedented’.
No UK data is scheduled for today’s session- meaning that Sterling is likely to find direction on external factors such as international relationships and the global energy crisis.
Euro (EUR) Trades Mixed on Varied Risk Appetite
The Euro (EUR) faced headwinds against several peers yesterday as risk sentiment wavered and European Central Bank (ECB) officials struck a dovish tone.
While weakness in the US Dollar (USD) lent upside support to the single currency, EUR struggled to gain as ECB top advisor Andrea Enria warned of ‘real estate vulnerabilities in some countries’ – shares and dollar bonds of Chinese real estate firms slid once more as another developer admits it may default.
Today’s Eurozone trade balance may lend some support to the Euro, as a €16.1B surplus is expected – such a figure would still be lower than July’s data, however.
US Dollar (USD) Softens as Treasury Yields Fall
The US Dollar lost support on Thursday, as Treasury bond yields fell following September’s inflation data. While housing, food and energy prices continued to rise, a slowing pace of economic growth did little to support the case for tighter monetary policy.
FOMC minutes also did little to raise USD sentiment, relaying that the Federal Reserve may not begin tapering until December while revealing concern over inflationary pressures.
Retail sales to be published this evening is unlikely to reverse ‘Greenback’ losses, as a contraction in sales growth is forecast for the month of September.
Canadian Dollar (CAD) Firms as Oil Prices Rise
The Canadian Dollar (CAD) trended higher during yesterday’s trading session as the commodity-linked ‘Loonie’ was buoyed by the continued rise in oil prices.
August manufacturing sales may influence Canadian Dollar trading into today, although CAD will more likely find direction on oil prices.
New Zealand Dollar (NZD) Rises Despite Covid Anxiety
The New Zealand Dollar (NZD) firmed on Thursday despite the country’s biggest rise in Covid cases in six weeks.
The ‘Kiwi’ likely benefitted from a risk-on mood and strength in the Australian Dollar, as Australia is NZ’s second-largest trading partner.
Data Releases
Oct 15th 07:30 NZD Business NZ PMI (Sep) N/A
Oct 15th 19:00 EUR Balance of Trade (Aug) €16.1B
Oct 15th 22:30 USD Retail Sales (Sep) -0.2%
Oct 16th 00:00 USD Michigan Consumer Sentiment Prelim (Oct) 73.1
Oct 16th 02:20 USD Fed Williams Speech N/A