Australian Dollar (AUD) Rocked by Mixed Market Mood
The Australian Dollar (AUD) initially rallied on Friday as the currency was supported by a prevailing risk-on mood.
However the ‘Aussie’ was forced to erase the majority of these gains by the end of the session, following a sudden turnaround in risk appetite.
It’s likely the Australian will remain beholden to risk sentiment at the start of this week, with AUD exchange rates potentially weakening if investors remain cautious.
New Zealand Dollar (NZD) Retreats as Sentiment Sours
Trade in the New Zealand Dollar (NZD) was also mixed at the end of last week amid a fluctuating market mood.
A weaker-than-expected print for New Zealand’s latest Business PMI also added to the pressure on NZD exchange rates on Friday.
However New Zealand’s latest services PMI could offer some support to the ‘Kiwi’ today, after another robust print in September.
Pound (GBP) Sinks as UK Chancellor Sacked
The Pound (GBP) had a turbulent end to last week’s session, with Sterling plummeting after Chancellor Kwasi Kwarteng was forced to resign.
The appointment of Jermery Hunt as the next Chancellor offered some fleeting support to Sterling. Before the selloff resumed after Prime Minister Liz Truss’s press conference announcing a U-turn on her proposed corporation tax cuts.
Looking ahead, could more fiscal and political uncertainty infuse additional volatility into the Pound at the start of this week?
Euro (EUR) Buoyed by Lagarde Comments
The Euro (EUR) initially trended lower on Friday, as the currency’s negative correlation with the US Dollar (USD) left it on the back foot as the latter rallied.
However, these losses were later reversed by comments from European Central Bank (ECB) President Christine Lagarde, in which she said the bank ‘expects to raise interest rates over the next several meetings.’
Turning to the start of this week, a lull in notable Eurozone data could see movement in the Euro driven primarily by Ukraine developments.
US Dollar (USD) Rally Cut Short by Weak Data
The US Dollar (USD) looked to close last week’s session on the front foot as a downbeat mood underpinned demand for the safe-haven currency.
However, the ‘Greenback’ relinquished most of these gains on Friday evening following the publication of the latest US retail sales figures, after they unexpectedly reported sales growth stalled last month.
Coming up, will another contraction in the New York Empire State manufacturing index undermine the US Dollar later this evening?
Canadian Dollar (CAD) Dented by Sliding Oil Prices
The Canadian Dollar (CAD) trended broadly lower on Friday as demand for the commodity-linked currency was undermined by another decline in oil prices.
Oil price dynamics may drive movement in the Canadian Dollar today in the absence of any notable CAD data. Will another drop in crude weaken the ‘Loonie’?
Data Releases
Oct 17th 07:30 NZD Services PSI (Sep) 56.6
Oct 17th 22:30 EUR Empire State Manufacturing Index (Oct) -1