Australian Dollar (AUD) Slips Despite China Reopening
The Australian Dollar (AUD) fell yesterday amid a retreat in global risk appetite. Market bets on a cautious forward path from the Reserve Bank of Australia (RBA) also weighed on the ‘Aussie’.
On the other hand, the currency saw its losses tempered by hopes for China’s continued reopening.
Looking ahead, a forecast rise in November’s business confidence index could boost the ‘Aussie’. A predicted uptick in December’s consumer confidence figures could have a similar effect.
New Zealand Dollar (NZD) Drops amid Risk-Off Mood
The New Zealand Dollar (NZD) dropped on Monday. The ‘Kiwi’ was pressured by a risk-off market mood as investors grew cautious ahead of a number of major central bank interest rate decisions later in the week.
With no major data releases today, any movement in NZD exchange rates is likely to remain linked to market risk appetite.
Pound (GBP) Boosted by Signs of Growth
The Pound (GBP) gained on Monday after a rise in October’s GDP data, with the UK’s economy growing by 0.5%, versus the 0.4% expansion forecast.
While GBP exchange rates rose following the release, analysts warned that the UK would still likely see a sharp recession which capped Sterling’s gains.
Looking ahead, if October’s unemployment rate remains close to record lows it could bolster the Pound.
Euro (EUR) Climbs as Markets Bet on 50bps ECB Rate Hike
The Euro (EUR) benefitted from a risk-off market mood on Monday. The single currency also found support from bets on a 50bps interest rate hike from the European Central Bank (ECB).
Fears that the Russia-Ukraine conflict could escalate further capped EUR’s gains, however.
A predicted slip in the Eurozone’s economic sentiment index today could cause losses for the Euro.
US Dollar (USD) Loses Ground ahead of Fed Interest Rate Decision
The US Dollar (USD) fell on Monday. Bets on USD were subdued ahead of the Federal Reserve’s interest rate decision on Wednesday. A slip in US Treasury bond yields also weighed on USD.
On the other hand, the safe-haven ‘Greenback’ saw its losses limited by a risk-off market mood yesterday.
Looking to today, a drop in domestic inflation in November could see USD fall. The data may prompt markets to further scale back Fed rate hike expectations.
Canadian Dollar (CAD) Slides as Oil Struggles to Recover
The Canadian Dollar (CAD) was pulled lower on Monday amid another slump in oil prices. A speech from Bank of Canada (BoC) Governor Tiff Macklem also caused movement in CAD.
With no significant data today, CAD exchange rates are likely to remain sensitive to oil price dynamics.
Data Calendar
Dec 13th 09:30 AUD Westpac Consumer Confidence Index (Dec) 80
Dec 13th 10:30 AUD NAB Business Confidence (Nov) 2
Dec 13th 17:00 EUR German Inflation Rate (Nov) -0.5%
Dec 13th 17:00 GBP Unemployment Rate (Oct) 3.7%
Dec 13th 20:00 EUR ZEW Economic Sentiment Index (Dec) -27
Dec 13th 23:30 USD Inflation Rate (Nov) 7.3%