Australian Dollar (AUD) Subdued on USD Strength, Chinese GDP
The Australian Dollar (AUD) fell against the majority of its peers yesterday as broad strength in the US Dollar weighed upon the risk-sensitive currencies and poor Chinese GDP exacerbated these losses.
According to strategists at Citi, ‘Slowing Chinese growth and global inflation concerns could bring headwinds to risk assets… Global equities are likely to be under pressure in coming months.’
Looking ahead, minutes from the Reserve Bank of Australia’s (RBA) latest meeting will be published this morning, potentially buoying trading sentiment if a hawkish tone is struck.
Pound (GBP) Mixed on Rate Hike, Brexit concerns
The Pound (GBP) traded in a narrow range on Monday as Bank of England (BoE) rate hike expectations and concerns over Brexit presented uncertainty.
Negotiations between the UK and EU appear to be progressing well, although the UK is already facing serious difficulties as a result of its independence. Rising energy prices are hurting UK businesses, alongside supply chain difficulties and labour shortages.
A speech from BoE Governor Andrew Bailey may influence trading today, clarifying the central bank’s rate hike expectations. Several analysts are concerned about the impact of an early BoE rate hike on UK growth prospects.
Euro (EUR) Finds Support despite Lack of data
The Euro (EUR) traded steadily against its peers yesterday despite a lack of Eurozone data, as a risk-off market mood supported EUR against more risk-sensitive currencies.
Recently, dovish signals from the European Central Bank (ECB) has been weighing upon Euro sentiment, as ECB President Christine Lagarde reiterated over the weekend that ‘the ECB is committed to preserving favourable financing conditions over the pandemic period.’
Speeches from central bank officials will be given today and tomorrow, which may help to direct Euro movement in the near-term.
US Dollar (USD) Climbs Broadly, Supported by US Treasury Yields
The US Dollar climbed for the most part on Monday, as a risk-off mood prevailed and investors flocked to the safe-haven currency.
USD then relinquished some of these gains overnight as US industrial production contracted by 1.3% in September, missing expectations for a modest expansion.
A variety of speeches from Federal Reserve officials overnight may support the US Dollar, if the speakers maintain a hawkish tone.
Canadian Dollar (CAD) Wavers on Inflation Projection
The Canadian Dollar (CAD) fluctuated through yesterday’s session over inflation concerns: Bank of Canada (BoC) governor Tiff Macklem said last week that ‘measures of inflation are probably going to take a little longer to come back down.’
Meanwhile, WTI crude is trading at a new 7-year high as oil prices continue to go up. Shortages of natural gas in Europe and Asia continue to boost demand for the commodity.
New Zealand Dollar (NZD) Spikes Up on High CPI
The New Zealand Dollar (NZD) rose against the majority of its peers on Monday off the back of a strong CPI release overnight. The country’s third quarter CP data revealed 4.9% growth, increasing at the fastest pace since 2010.
Data Releases
Oct 19th 11:30 AUD RBA Meeting Minutes N/A
Oct 19th 21:10 EUR ECB Elderson Speech N/A
Oct 19th 22:00 EUR ECB Panetta Speech N/A
Oct 19th 22:05 GBP BoE Gov Bailey Speech N/A
Oct 20th 00:00 EUR ECB Lane Speech N/A
Oct 20th 01:00 USD Fed Daly Speech N/A
Oct 20th 03:15 USD Fed Bowman Speech N/A
Oct 20th 04:50 USD Fed Bostic Speech N/A
Oct 20th 05:00 USD Fed Waller Speech N/A