Australian Dollar (AUD) Falls as Risk Appetite Fades
The Australian Dollar (AUD) strengthened yesterday as China vowed to boost its economy in 2023, sparking a risk-on mood in markets.
However, the market mood soured during the European trading hours, causing the risk-sensitive ‘Aussie’ to relinquish its gains.
Looking ahead, the latest data from the Australian housing sector could keep pressure on AUD today.
New Zealand Dollar (NZD) Declines as Market Mood Sours
The New Zealand Dollar (NZD) also rose and fell on Thursday, with the shift in the market mood driving movement in the risk-sensitive ‘Kiwi’.
With no significant data for NZD today, the currency is likely to continue trading on risk appetite.
Pound (GBP) Falls after Downward Revision to Q3 GDP
The Pound (GBP) fell on Thursday after third-quarter GDP growth figures were revised lower.
The British economy contracted by 0.3% in the three months from July to September, with the data all but confirming a 2023 recession for the UK.
GBP will see no significant data today. In the absence of data, further industrial action could weigh on Sterling.
Euro (EUR) Gains after Hawkish ECB Comments
The Euro (EUR) firmed yesterday. Hawkish comments from multiple European Central Bank (ECB) officials signalling further interest rate hikes underpinned EUR.
Russia-Ukraine worries kept the single currency’s gains limited, however. Comments from Russian President Vladimir Putin pledging no financial limits on military spending weighed on EUR.
The Russia-Ukraine conflict and changes in risk appetite are likely to affect the Euro today amid a lack of major data.
US Dollar (USD) Climbs after Upward GDP Revision
The US Dollar (USD) was bolstered by an upward revision to third-quarter GDP figures on Thursday. The US economy expanded by 3.2% versus a forecast increase of 2.9%.
A below-forecast rise in jobless claims also supported the currency. The data pointed to a still-tight labour market, boosting market bets on further interest rate hikes from the Federal Reserve.
Looking ahead, a cooldown in the core PCE price index could weigh on USD tonight. A drop in the Fed’s preferred measure of inflation may see markets pare back rate hike bets.
Canadian Dollar (CAD) Boosted by Oil Recovery
The Canadian Dollar (CAD) rose on Thursday. The ‘Loonie’ was pushed higher by climbing oil prices and a strong US Dollar.
October’s GDP figures are expected to print lacklustre results today, which could weigh on CAD.
Data Releases
Dec 23rd 10:30 AUD Housing Credit (Nov) 0.3%
Dec 23rd 23:30 CAD GDP (Oct) 0.1%
Dec 23rd 23:30 USD Personal Income (Nov) 0.3%
Dec 23rd 23:30 USD Personal Spending (Nov) 0.2%
Dec 23rd 23:30 USD Durable Goods Orders (Nov) -0.6%
Dec 23rd 23:30 USD Core PCE Price Index (Nov) 4.7%