Australian Dollar (AUD) Fall as RBA Rate Hike Disappoints Markets
The Australian Dollar (AUD) came under pressure after a below-forecast interest rate hike from the Reserve Bank of Australia (RBA).
However, the downside for AUD was cushioned by an uptick in iron ore prices. Hints from the RBA that they will be continue with rate hikes also underpinned the ‘Aussie’.
The final printing of August’s retail figures could pull the currency lower if they confirm a fall in sales volumes. An expected uptick in service sector output could limit drastic losses, however.
New Zealand Dollar (NZD) Slumps despite Hawkish RBNZ Bets
The New Zealand Dollar (NZD) fell on Tuesday due to its positive correlation to the Australian Dollar (AUD).
The RBNZ’s interest rate decision will be the key focus for NZD today. A 0.5% hike could push the currency higher.
Pound (GBP) Firms as Tax Plan U-Turn Bolsters Confidence
The Pound (GBP) saw edged higher on Tuesday. The government’s U-turn over tax cut plans supported gains for GBP.
On the other hand, Sterling’s upward movement was limited by confusion over when Chancellor Kwasi Kwarteng would present his mid-term financial plans.
With no significant data today, investors will likely be watching any further developments surrounding the UK government’s economic policy.
Euro (EUR) Soars as Hot PPI Figures add to ECB Rate Hike Bets
The Euro (EUR) climbed on Tuesday despite a risk-on market mood.
Signals from the European Central Bank (ECB) that they will pursue aggressive interest rate hikes bolstered EUR today. An above-forecast rise in August’s PPI figures also added fuel to these bets.
A forecast widening in Germany’s trade deficit could push EUR higher later this afternoon if August’s figures print as forecast.
US Dollar (USD) Falls as Job Opening Decline Signals Potential Slowdown
The US Dollar tumbled yesterday amid a return of global risk appetite. A pullback in US Treasury bond yields also weighed on the ‘Greenback’ on Tuesday.
An above-forecast drop in job opening figures for August also weighed on USD. The currency found some support from persistent Federal Reserve rate hike bets, however.
A boost to employment levels and a narrowing of August’s trade surplus could bolster USD.
Canadian Dollar (CAD) Slips Despite Oil Price Rally
The Canadian Dollar (CAD) fell lower against its rivals on Tuesday despite rising crude oil prices. Reports that the Bank of Canada’s (BoC) inflation measures are losing credibility amongst markets weighed on CAD.
A forecast narrowing of Canada’s trade surplus could limit gains for CAD today.
Data Releases
Oct 5th 11:00 NZD RBNZ Interest Rate Decision 3.5%
Oct 5th 16:00 EUR German Balance of Trade (Aug) €7.3bn
Oct 5th 22:15 USD ADP Employment Change (Sep) 200,000
Oct 5th 22:30 CAD Balance of Trade (Aug) C$3.45B
Oct 5th 22:30 USD Balance of Trade (Aug) $-67.7bn
Oct 5th 00:00 USD ISM Non-Manufacturing PMI (Sep) 56