Australian Dollar (AUD) Slumps as 25bps RBA Rate Hike Disappoints
The Australian Dollar (AUD) fell over the course of yesterday. The ‘Aussie’ was initially bolstered by upbeat Chinese manufacturing data.
The Reserve Bank of Australia’s (RBA) cautious 25bps rate hike weighed on AUD, however, with dovish comments from RBA Governor Philip Lowe also denting confidence in the currency.
Further evidence of a downturn in the country’s manufacturing sector could cause further losses in the ‘Aussie’ today.
New Zealand Dollar (NZD) Rises after Better-Than-Forecast Chinese Data
The New Zealand Dollar (NZD) climbed on Tuesday amid a risk-on market mood. Better-than-forecast Chinese manufacturing data lending support to the ‘Kiwi’.
If third quarter unemployment remains close to record-lows today, it could push NZD higher.
Pound (GBP) Subdued amid UK Manufacturing Slump
The Pound (GBP) was muted yesterday. Sterling was pulled lower by poor data for the UK’s manufacturing sector. The sector saw its biggest contraction in September since May 2020.
Losses for the currency were limited by aggressive market bets on a 75bps interest rate hike from the Bank of England (BoE), however.
With no significant data today, GBP may be affected by domestic political headwinds and BoE rate hike bets.
Euro (EUR) Slides amid Fears ECB Could Push Eurozone into Recession
The Euro (EUR) was pushed lower on Tuesday amid a resurgent US Dollar (USD). A risk-on mood also dented confidence in the single currency.
EUR also struggled yesterday amid expectations of aggressive interest rate hikes from the European Central Bank (ECB). Markets are concerned that future hikes could push the Eurozone into a recession.
A widening in Germany’s trade surplus could help EUR to recover today. On the other hand, a forecast downturn in the Eurozone manufacturing sector could limit any gains.
US Dollar (USD) Losses Limited by Above-Forecast Job Openings
The US Dollar (USD) saw a drop on Tuesday amid a risk-on trading sentiment. A slowdown in the US manufacturing sector in October also weighed on the currency.
An above-forecast increase in job openings underpinned USD, however. Signs of a resilient economy bolstered bets for a bumper interest rate hike from the Federal Reserve ahead of their meeting on Thursday.
With a 75bps rate hike from the Fed already priced in, the focus for USD investors today will be on the bank’s latest forward guidance. Will the US Dollar fall if the Fed signals plans to slow the pace of future rate hikes?
Canadian Dollar (CAD) Falls as Manufacturing Sector Struggles
The Canadian Dollar (CAD) slipped yesterday as a larger-than-forecast contraction in the country’s manufacturing sector weighed on CAD.
Speeches from Bank of Canada (BoC) board members could push the currency lower today if they reaffirm the bank’s dovish outlook on future interest rate hikes.
Data Releases
Nov 2nd 07:45 NZD Unemployment Rate (Q3) 3.2%
Nov 2nd 08:00 NZD RBNZ Press Conference
Nov 2nd 17:00 EUR German Balance of Trade (Sep) €1.4bn
Nov 2nd 18:55 EUR German Unemployment Rate (Oct) 5.5%
Nov 2nd 19:00 EUR S&P Global Manufacturing PMI (Oct) 46.6
Nov 2nd 22:15 USD ADP Employment Change (Oct) 193,000
Nov 3rd 04:00 USD Fed Interest Rate Decision 4%