Australian Dollar (AUD) Undermined by Downbeat Chinese Data
The Australian Dollar (AUD) found limited success yesterday, despite an upbeat market mood boosting the appeal of the risk-sensitive ‘Aussie’.
AUD’s upside was offset by some troubling trade figures from China. Unexpected contractions in both imports and exports stoked fears about China’s slowing economic growth. This in turn weighed on the Australian Dollar, which often trades as a proxy for the Chinese economy.
Looking ahead, the latest Australian consumer and business confidence indexes are out this morning. With economists forecasting drops in both, AUD could face headwinds.
New Zealand Dollar (NZD) Trades in Tandem with AUD
The New Zealand Dollar (NZD) wavered higher against some of its weaker peers yesterday but struggled elsewhere.
The mixed movement came amid a lack of New Zealand data, which left NZD trading true to its strong positive correlation to AUD.
Business inflation expectations in New Zealand this afternoon could impact the ‘Kiwi’. If expectations decline as expected, it takes some pressure off the Reserve Bank of New Zealand (RBNZ) to raise interest rates, which may thereby dent NZD.
Pound (GBP) Recovers from Post-BoE Slump
The Pound (GBP) strengthened yesterday, recovering after the Bank of England (BoE) decision last week triggered a sell-off.
It seemed that Sterling had entered oversold conditions, with markets repositioning as the new week began and some traders picking up a bargain on the undervalued Pound.
A speech from BoE Chief Economist Huw Pill could impact the Pound this evening. If he reinforces expectations that the bank will slow its policy tightening cycle, GBP exchange rates could slip again.
Euro (EUR) Mixed amid Positive Data and Ukraine Fears
Stronger-than-expected German data lifted the Euro (EUR) yesterday, seeing it rise against some of its weaker peers.
However, Russia-Ukraine worries weighed on the single currency. Ukrainian President Volodymyr Zelenskiy warned of more ‘mass attacks’ on energy infrastructure as the country braced for blackouts.
Coming up, an expected recovery in Eurozone retail sales could buoy the single currency later tonight. However, further downbeat headlines from Ukraine could continue to cap the upside.
US Dollar (USD) Continues to Drop amid Risk-On Mood
The US Dollar (USD) declined yesterday, extending last week’s losses after America’s latest jobs report saw markets rein in their expectations for more aggressive Federal Reserve interest rate rises.
In addition, a risk-on mood swept markets, putting further downward pressure on the safe-haven ‘Greenback’.
Some speeches from Fed officials could impact USD today, with any dovish comments likely weighing on the American Dollar. In addition, the US midterm elections could cause volatility.
Canadian Dollar (CAD) Dented by Weakening US Dollar
The Canadian Dollar (CAD) fell yesterday as the currency’s increasingly positive correlation with the US Dollar overpowered any upside from rising oil prices.
An ongoing lack of Canadian economic data could leave CAD vulnerable to further losses today.
Data Releases
Nov 8th 08:30 AUD Ai Group Services Index (Oct) 47.5
Nov 8th 10:00 USD Fed Barkin Speech
Nov 8th 10:30 AUD Westpac Consumer Confidence Index (Nov) 82.7
Nov 8th 11:30 AUD NAB Business Confidence (Oct) 1
Nov 8th 20:00 GBP BoE Pill Speech
Nov 8th 21:00 EUR Retail Sales MoM (Sep) 0.4%