Australian Dollar (AUD) Nosedives on Dovish RBA
The Australian Dollar (AUD) slumped yesterday after the Reserve Bank of Australia (RBA) held interest rates steady for the third consecutive month.
Furthermore, the central bank warned about underwhelming growth in the economy, while also forecasting that unemployment could climb to 4.5% by next year.
Turning to today, the latest GDP growth data could boost the ‘Aussie’. Forecasters expect the Australian economy to have accelerated in the second quarter, from 0.2% growth in Q1 to 0.3% in Q2.
New Zealand Dollar (NZD) Undermined by Souring Market Mood
The New Zealand Dollar (NZD) tumbled against most of its major rivals yesterday as a risk-averse mood swept markets.
Further evidence of a slowdown in Chinese economic activity dragged risk sentiment down, as did renewed inflation fears following a sharp jump in oil prices.
Looking ahead, a lack of NZD data could leave the currency to trade in tandem with AUD. Will upbeat Australian GDP help the ‘Kiwi’ regain ground?
Pound (GBP) Slips as Crucial Services Sector Tumbles
The Pound (GBP) was under increased pressure yesterday as a contraction in the vital services sector was confirmed.
The latest in a string of disappointing data only served to exacerbate recession fears, as the UK’s economic outlook darkens.
With no notable data due out for the rest of this week, the Pound could be left vulnerable to market sentiment and growing recession risks.
Euro (EUR) Under Pressure from Downbeat Data
The Euro (EUR) came under moderate selling pressure yesterday amid signs of a slowing economy and easing inflationary pressures.
The Eurozone’s final services PMI was revised lower, rattling EUR investors. Meanwhile, producer price inflation declined 0.5% July, denting European Central Bank (ECB) rate hike bets.
Turning to today, more downbeat data could weigh on the Euro. German factory orders are forecast to slump while Eurozone retail sales are set to contract for the second consecutive month.
US Dollar (USD) Rallies on Risk-Averse Mood
The US Dollar (USD) strengthened considerably yesterday despite a lack of major economic data.
A souring market mood amid recession fears and elevated interest rates saw the safe-haven ‘Greenback’ climb.
Coming up, the latest ISM services PMI is out overnight. Despite expectations of a modest slowdown, the sector remains in expansion territory, highlighting a resilient US economy. This could boost USD.
Canadian Dollar (CAD) Strengthens as Oil Prices Jump by 2%
The commodity-linked Canadian Dollar (CAD) found renewed strength yesterday as Russia and Saudi Arabia extended oil production cuts, propelling crude prices to a ten-month high.
Looking ahead, tonight will see the latest interest rate decision from the Bank of Canada (BoC). Markets expect the BoC to leaves rates unchanged. Could a surprise hike see CAD surge higher?
Data Releases
6th Sep 11:30 AUD GDP Growth Rate (Q2) 0.3%
6th Sep 16:00 EUR DE Factory Orders (Jul) -4%
6th Sep 19:00 EUR EA Retail Sales MoM (Jul) -0.1%
7th Sep 00:00 CAD BoC Interest Rate Decision 5%
7th Sep 00:00 USD ISM Services PMI (Aug) 52.5