Australian Dollar (AUD) Fluctuates on Low Risk Appetite
The Australian Dollar (AUD) tumbled on Thursday as risk-off flows benefitted safe-haven currencies such as the US Dollar (USD).
Depressing market sentiment, the Omicron variant continues to spread – the new strain has now been reported in 57 countries. International tensions between the US and Iran also applied downside.
Looking ahead, a lack of data leaves the ‘Aussie’ to trade on risk sentiment and other external factors – further Covid-related headwinds could pressure AUD further.
Pound (GBP) Trades Mixed as UK Covid Restrictions Enforced
The Pound (GBP) traded in a wide range against its peers yesterday as UK officials introduced new measures to curb the spread of Covid.
The restrictions mean face masks will once again be mandatory in various settings – individuals will also have to show an NHS Covid pass to be admitted to large venues and nightclubs. The measures were seen as decreasing the chance of rate hike from the Bank of England (BoE) this month.
UK GDP data is likely to drive Sterling movement today – if growth slowed in October as expected, GBP could under pressure.
Euro (EUR) Fluctuates on ECB Outlook and German Data
The Euro (EUR) wavered on Thursday on stark policy divergence between the European Central Bank (ECB) and other central banks. According to Reuters, the ECB intends to boost its Asset Purchase Programme, as other countries wind down support.
A fall in Germany’s October trade balance also pressured the single currency, as pandemic and delivery logistics impacted imports and exports.
German inflation data today could subdue EUR given the unlikely prospect of policy tightening from the ECB. The final estimate is expected to confirm an increase on last month.
US Dollar (USD) Benefits from Safe-Haven Appeal
The US Dollar ticked up yesterday as a risk-off mood drew investor support to safe-haven currencies.
Also supporting the ‘Greenback’, initial jobless claims fell by more than expected from last week’s figure. The number of Americans applying for unemployment benefits dropped to the lowest level since September 1969.
The US consumer price index will be the main driver of USD movement today – if inflation rises as expected, the US Dollar will likely enjoy tailwinds on increased bets of Fed policy tightening.
Canadian Dollar (CAD) Sinks despite High Oil Prices
The Canadian Dollar (CAD) trended down on Thursday despite oil prices above $70 per barrel. US Dollar strength applied headwinds amidst a risk-off market mood, while Wednesday’s underwhelming interest rate decision from the Bank of Canada (BoC) also limited demand.
New Zealand Dollar (NZD) Wavers Amidst Omicron Concerns
The New Zealand Dollar (NZD) sank against several peers yesterday as a cautious market mood subdued the risk-sensitive currency. Losses were capped by Pfizer vaccine optimism.
Data Releases
Dec 10th 17:00 EUR German Inflation Rate Final (Nov) 5.2%
Dec 10th 17:00 GBP GDP (Oct) 0.4%
Dec 10th 17:00 GBP Balance of Trade (Oct) £-3.2bn
Dec 10th 17:00 GBP Industrial Production (Oct) 0.1%
Dec 10th 19:05 EUR ECB President Lagarde Speech N/A
Dec 10th 23:30 USD Inflation Rate (Nov) 6.8%
Dec 11th 01:00 USD Michigan Consumer Sentiment Prelim (Dec) 67.1