Australian Dollar (AUD) Knocked by Weak Risk Appetite
The Australian Dollar (AUD) sank on Thursday, demand for the currency being undermined by risk-off flows.
The drop in risk appetite came amid an uptick in the US Dollar and aggressive Federal Reserve rate hike bets.
Barring a reversal in risk sentiment, the ‘Aussie’ may extend these losses today.
New Zealand Dollar (NZD)
The New Zealand Dollar (NZD) also slumped yesterday as a cautious market mood saw investors shun the risk-sensitive currency.
Meanwhile, the release of New Zealand’s latest Business PMI may drag on the ‘Kiwi’ today as last month’s index reported a slowdown in growth in the manufacturing sector.
Pound (GBP) Soars amid Rumours of More Budget U-Turns
The Pound (GBP) shot higher on Thursday as GBP investors seized on rumours suggesting the UK government may scrap more parts of its controversial mini-budget.
Reports suggest in the face of considerable opposition from leading economists and her own MPs, Prime Minister Liz Truss is likely to reverse plans to cut corporation tax.
It’s likely the focus for GBP investors will remain firmly on UK fiscal policy today. Any denial from the government is planning to rethink more parts of the mini-budget could send the Pound crashing back to earth.
Euro (EUR) Subdued amid Ukraine Concerns
The Euro (EUR) struggled to attract support yesterday as EUR investors remained wary of events in Ukraine and the ongoing threat the conflict poses to the Eurozone economy.
Further limiting EUR sentiment was the single currency’s negative correlation with the US Dollar, as the latter rallied in overnight trade.
Eurozone data remains thin on the ground today, potentially leaving the Euro vulnerable to more Ukraine driven weakness.
US Dollar (USD) Rallies on Upbeat Inflation Figures
The US Dollar (USD) rallied against the majority of its peers on Thursday, following the release of the latest US consumer price index.
September’s CPI figures reported both headline and core inflation beat forecasts, reinforcing expectations for another 75bps interest rate hike from the Federal Reserve next month.
Looking ahead, the release of the latest US retail sales figures could place some modest pressure on USD exchange rates later this evening as economists forecast sales growth slowed in September.
Canadian Dollar (CAD) Softens as Oil Prices Slide
The Canadian Dollar (CAD) trended lower through yesterday’s session. The commodity-linked currency being undermined by the continued slump in oil prices.
If this downtrend in crude persists through to the end of the week it’s likely the ‘Loonie’ could under even more pressure today.
Data Releases
Oct 14th 10:30 NZD Business PMI (Sep) 52.9
Oct 14th 19:00 EUR Balance of Trade (Aug) €-37bn
Oct 14th 22:30 USD Retail Sales (Sep) 0.2%
Oct 15th 00:00 USD Consumer Sentiment (Oct) 59