Australian Dollar (AUD) Soars after Above-Forecast Inflation Figures
The Australian Dollar (AUD) leaped yesterday after a hotter-than-expected domestic inflation print. Third quarter inflation rose to 7.3% versus forecasts of 7%, a 32-year high.
The figures bolstered bets for further interest rate hikes from the Reserve Bank of Australia (RBA). The bets came despite recent signals from the RBA that they would be slowing their pace of policy tightening.
With no significant data today, movement in the ‘Aussie’ may be driven by risk appetite and RBA rate hike bets.
New Zealand Dollar (NZD) Rises Despite Fall in Business Confidence
The New Zealand Dollar (NZD) was bolstered by its positive correlation to the Australian Dollar (AUD) on Wednesday, which helped to offset a weaker-than-expected business confidence reading.
A sparse data calendar will likely see the ‘Kiwi’ driven by market risk sentiment today.
Pound (GBP) Climbs as PM Sunak’s Cabinet Meets for First Time
The Pound (GBP) maintained a positive trajectory on Wednesday. Sterling continued to be underpinned by the appointment of Rishi Sunak as Prime Minister.
GBP also saw a rise amid increased bets on a 1% interest rate hike from the Bank of England (BoE). The increased bets came after a delay to the UK government’s announcement of its spending plans.
A drop in October’s distributive trades figures may weigh on Sterling today if figures print as forecast.
Euro (EUR) Ticks Lower Ahead of ECB Interest Rate Decision
The Euro (EUR) edged lower yesterday. Interest in the single currency was limited ahead of the European Central Bank’s interest rate decision on Thursday.
A drop in German 10-year bond yields also weighed on EUR. Additionally, Further escalations in the Russia-Ukraine conflict kept pressure on the single currency.
A drop in consumer confidence today could see the Euro slip, although a bumper rate hike from the ECB could see the single currency rally.
US Dollar (USD) Slips as Investors Continue to Pare Back Fed Rate Hike Bets
The US Dollar (USD) extended its decline yesterday despite a risk-off trading sentiment. A continued paring of bets on bumper interest rate hikes from the Federal Reserve weighed on the currency.
Despite the prospect of a pivot from the Fed, the ‘Greenback’ was underpinned by persistent bets for a 75bps interest rate hike at its November meeting.
Looking ahead, could a sharp expansion the US economy in the third quarter help USD stage a recovery today?
Canadian Dollar (CAD) Plummets after Below-Forecast BoC Interest Rate Hike
The Canadian Dollar (CAD) tumbled on Wednesday after a below forecast 50bps interest rate decision from the Bank of Canada (BoC).
The fallout from the BoC’s interest rate decision and changes in oil prices could drive CAD today.
Data Releases
Oct 27th 16:00 EUR German GfK Consumer Confidence (Nov) -41.9
Oct 27th 20:00 GBP CBI Distributive Trades (Oct) -38
Oct 27th 22:15 EUR ECB Interest Rate Decision 2%
Oct 27th 22:30 USD GDP Growth Rate (Q3) 2.4%
Oct 27th 22:30 USD Initial Jobless Claims (22/Oct) 220,000