Australian Dollar (AUD) Falls amid Chinese Covid-19 Surge
The Australian Dollar (AUD) fell on Wednesday amid a drop in risk appetite. The ‘Aussie’s only gains were due to comparative weakness in the Pound (GBP) and the Euro (EUR).
A variety of headwinds contributed to the currency’s losses. Rising Covid-19 case levels in China as well as widespread flooding damage in Australia weighed on AUD.
If unemployment remains close to record lows today, then it could bolster AUD amid Reserve Bank of Australia (RBA) rate hike bets.
New Zealand Dollar (NZD) Slips amid Risk-Off Mood
The New Zealand Dollar (NZD) saw losses yesterday amid a pullback in risk appetite. Hawkish bets on action from the Reserve Bank of New Zealand (RBNZ) underpinned the currency, however.
Looking ahead, any movement in the ‘Kiwi’ today is likely to be linked to changes in risk appetite.
Pound (GBP) Drops as PM Truss Fights for Survival
The Pound (GBP) slumped on Wednesday amid continued political instability in the UK. Prime Minister Liz Truss saw further calls for her resignation.
Additionally, hotter-than-forecast inflation figures had a mixed effect on Sterling. Whilst the figures boosted Bank of England (BoE) rate hike bets, the soaring prices stoked cost of living concerns.
With no significant data today, movement in GBP is likely continued to be driven by UK political developments.
Euro (EUR) Slips as Ukraine Prepares Kherson Counteroffensive
The Euro (EUR) slipped against its rivals yesterday amid an apparent escalation in the Russia-Ukraine conflict weighed on EUR.
The single currency saw drastic losses limited by bets on a 75bps interest rate hike from the European Central Bank (ECB) at its next meeting.
Later today, a forecast slump in German PPI could ease bets on ECB action and push EUR lower.
US Dollar (USD) Climbs amid Bets on Bumper Fed Rate Hikes
The US Dollar (USD) made strong gains on Wednesday. A risk-off mood benefitted the safe-haven ‘Greenback’ as well as a rally in US Treasury bond yields.
USD also found support from bets on bumper 75bps interest rate hikes from the Federal Reserve at the bank’s next two meetings.
Speeches from multiple Fed officials today could push USD exchange rates higher today. On the other hand, an uptick in jobless claims could cap gains for the currency amid signs of a weaker labour market.
Canadian Dollar (CAD) Bolstered by Oil Price Rise
The Canadian Dollar (CAD) edged higher on Wednesday. An uptick in oil prices boosted the commodity-tied ‘Loonie’ as did a smaller-than-expected fall in domestic inflation last month.
With no significant data today, CAD’s movement is likely to be driven by any further fluctuations in oil prices.
Data Releases
Oct 20th 08:30 USD Fed Evans Speech
Oct 20th 09:30 USD Fed Bullard Speech
Oct 20th 10:30 AUD Unemployment Rate (Sep) 3.5%
Oct 20th 16:00 EUR German PPI (Sep) 1.3%
Oct 20th 22:30 USD Initial Jobless Claims (15/Oct) 213000