Australian Dollar (AUD) Drops on Chinese Slowdown Concerns
The Australian Dollar (AUD) fell against its peers on Monday as a risk-off mood sapped appeal.
Signs of an economic slowdown in China dented the ‘Aussie’, given the currency’s role as a proxy for the Chinese economy. Retail sales and industrial output printed below expectations, sparking fears that China could miss its annual growth target.
Today, the Reserve Bank of Australia (RBA) will publish the minutes from its latest policy meeting. Given investors’ downbeat response to the bank’s latest rate hike, today’s release could inspire further AUD headwinds.
New Zealand Dollar (NZD) Tumbles in Risk-Off Trade
The New Zealand Dollar (NZD) weakened in tandem with its sister currency yesterday, amid the souring market mood.
Into today, the New Zealand Dollar may trade on AUD dynamics, tumbling if the RBA meeting minutes strike a dovish tone.
Pound (GBP) Mixed as Rising Energy Bills Worry Investors
The Pound (GBP) wavered against its peers at the beginning of the week, subdued by suggestions the UK government may miss targets for energy support payments.
Earlier in the year, the government vowed to make up for half the cost of household energy price increases. To keep this promise, the Institute for Fiscal Studies (IFS) said the government would need to find another £12bn.
The release of the UK’s latest jobs report will be a key focus for GBP investors today. Will weak wage growth figures drag on the Pound?
Euro (EUR) Fluctuates on Recession Fears, Energy Concerns
The Euro (EUR) fluctuated on Monday as fears of a recession capped gains for the currency.
A recent poll conducted by Bloomberg indicated that an economic contraction in the Eurozone is now more likely than not. Furthermore, a lack of energy security has led several EU countries to ban certain types of electricity use.
In today’s docket are German’s latest ZEW economic sentiment index, where another deterioration of sentiment in Europe’s largest economy may dent the single currency.
US Dollar (USD) Buoyed by Risk-Off Mood
The US Dollar (USD) trended up against its peers yesterday, supported by a risk averse market mood.
Disappointing economic data from China inspired risk-off trading sentiment, alongside escalating geopolitical tensions. Overnight, the NY Empire State manufacturing index printed below expectations: but this failed to significantly detract from USD strength.
If industrial production rose by 0.3% in July as anticipated – following a contraction in June – the ‘Greenback’ may extend its gains through today’s session.
Canadian Dollar (CAD) Slumps as Oil Prices Retreat
The Canadian Dollar (CAD) lost support at the beginning of the week, as both real-time and forecast oil demand dropped on an unexpected economic slowdown in China.
Today, Canada’s CPI data expected to reveal that inflation fell in the year to July, potentially denting the ‘Loonie’ further amid weaker expectations for policy tightening from the Bank of Canada (BoC).
Data Releases
Aug 16th 11:30 AUD RBA Meeting Minutes N/A
Aug 16th 16:00 GBP Unemployment Rate (Jun) 3.8%
Aug 16th 16:00 GBP Average Earnings incl. bonuses (Jun) 4.5%
Aug 16th 19:00 EUR Balance of Trade (Jun) €-20bn
Aug 16th 19:00 EUR German ZEW Economic Sentiment Index (Aug) -53.8
Aug 16th 22:30 CAD Inflation Rate (Jul) 7.6%
Aug 16th 23:15 USD Industrial Production (Jul) 0.3%