Australian Dollar (AUD) Wavers on Risk-Off Mood
The Australian Dollar (AUD) fluctuated against its peers on Wednesday as a risk-off mood dented ‘Aussie’ sentiment.
Forecasts of weaker demand for Australian commodities dampened trading sentiment, but upbeat Chinese data revived some support, as China’s annual inflation rate rose to 1.5% in October 2021: halfway to Beijing’s CPI target.
Australian employment data is likely to influence AUD trading today. If unemployment rises to 4.8% as expected, the ‘Aussie’ will likely face some pressure.
Pound (GBP) Weakens on Economic Outlook, Brexit Jitters
The Pound (GBP) sank yesterday as risk aversion sapped support for the currency – downbeat comments from the National Institute of Economic and Social Research (NIESR) also weighed upon Sterling.
Meanwhile, ongoing fears that the UK would trigger article 16 added to downside pressure, as Ireland’s deputy prime minister admitted that Ireland has already begun to make contingency plans.
Today’s GDP growth rate preliminaries are likely to inspire movement going forward: growth looks to have slowed to 1.5% for the third quarter.
Euro (EUR) Weakens on US Dollar Strength
The Euro (EUR) tumbled against several peers on Wednesday as the US Dollar (USD) strengthened following a stronger-than-expected inflation release.
Earlier in the session, EUR had found some support even as German inflation surged. Rising energy prices were a driving factor behind the 4.5% hike.
Various speeches from European Central Bank (ECB) officials may inspire movement today, alongside the ECB’s macroeconomic projections – although policymakers’ outlook is expected to remain unchanged.
US Dollar (USD) Buoyed by High Inflation
The US Dollar found support yesterday as annual inflation rose to 6.2% – the highest reading since November 1990. Underlying inflation also surged rising its highest levels since 1991.
Investors hope that evident inflationary pressures will prompt the Federal Reserve to tighten monetary policy sooner than expected. Economists are sceptical that high inflation is temporary as the Fed has recently reiterated.
A US holiday could result in thin trading conditions in the US Dollar today, potentially leaving it vulnerable to losses.
Canadian Dollar (CAD) Climbs on Rising Oil Prices, Hawkish BoC
The Canadian Dollar (CAD) firmed against its peers on Wednesday as rising oil prices coupled with hawkish signals from the Bank of Canada (BoC) supplied support.
Markets are pricing in an imminent rate hike as Governor Tiff Macklem pledges to adjust the bank’s monetary settings.
New Zealand Dollar (NZD) Losses Capped by Chinese Data
The New Zealand Dollar (NZD) fell against most of its peers yesterday, but losses were capped by positive news from China – New Zealand’s biggest trading partner.
Data Releases
Nov 11th 10:30 AUD Unemployment Rate (Oct) 4.8%
Nov 11th 10:30 AUD Employment Change (Oct) 50K
Nov 11th 17:00 GBP Balance of Trade (Sep) £-3.4bn
Nov 11th 17:00 GBP GDP Growth Rate Prelim (Q3) 1.5%
Nov 11th 17:00 GBP Industrial Production (Sep) 0.2%
Nov 11th 17:00 GBP Manufacturing Production (Sep) 3.1%
Nov 11th 19:00 EUR ECB Economic Bulletin N/A
Nov 11th 20:00 EUR ECB Macroeconomic Projections N/A
Nov 12th 02:00 EUR ECB Schnabel Speech N/A
Nov 12th 07:30 NZD Business PMI (Oct) 52.3