Australian Dollar (AUD) Rebounds from Two-Year Low
Trade in the Australian Dollar (AUD) was mixed yesterday, amid fluctuating market risk appetite.
This saw the AUD/USD exchange rate strike a new two-year low during the Asian session, before rebounding in European trade as risk appetite improved.
In the absence of any notable AUD data, trade in the ‘Aussie’ is likely to remain tied to market sentiment. Will renewed demand for the US Dollar push AUD exchange rates lower?
New Zealand Dollar (NZD) Firm amid RBNZ Rate Expectations
The New Zealand Dollar (NZD) traded with modest gains on Wednesday, the ‘Kiwi’ continuing to attract support amid speculation the Reserve Bank of New Zealand (RBNZ) will raise interest rates again before the end of the year.
Could this speculation allow the New Zealand Dollar to extend its gains today?
Pound (GBP) Strengthens Amid BoE Bond Purchase Confusion
The Pound (GBP) rallied during yesterday’s European session amid reports the Bank of England (BoE) was considering extending its emergency bond purchases.
Despite the BoE later reaffirming its plans to end its bond purchases this week, Sterling was able to hold on to the majority of these gains. With GBP investors also shrugging of the UK’s worse-than-expected GDP figures.
A sparse data calendar may see movement in the Pound driven by ongoing UK fiscal and political uncertainty, potentially limiting any further upside for Sterling.
Euro (EUR) Steady as Eurozone Data Beats Forecast
The Euro (EUR) was stable on Wednesday as EUR investors welcomed the Eurozone’s latest industrial production figures.
August’s release reported factory output in the bloc grew by 1.5%. Rebounding from a 2.3% contraction in July and beating forecasts for a more modest 0.6% expansion.
Coming up, the latest German CPI release is expected to confirm inflation in the Eurozone’s largest economy rocketed to 10% last month. Potentially offering some modest support to the Euro later this afternoon.
US Dollar (USD) Muted ahead of US Inflation Release
The US Dollar (USD) was mostly rangebound overnight on Wednesday, as a mixed market mood and dip in US Treasury yields limited USD demand.
USD investors were also reluctant to make any aggressive bets ahead of the latest US consumer price index.
While headline inflation is forecast to have slowed in September, an expected rise in the core print could bolster Federal Reserve rate hike bets and lift the US Dollar today.
Canadian Dollar (CAD) Subdued as Oil Prices Extend Decline
The Canadian Dollar (CAD) was mostly muted on Wednesday as another drop in oil prices saw investors shy away from the commodity-linked currency.
In the continued absence of any Canadian data of note, oil price dynamics may remain the main catalyst of movement for the ‘Loonie’ today.
Data Releases
Oct 13th 16:00 EUR German Inflation Rate (Sep) 10%
Oct 13th 22:30 USD Inflation Rate (Sep) 8.1%