Australian Dollar (AUD) Underpinned by Better-than-Expected GDP Growth
The Australian Dollar (AUD) found renewed strength yesterday after the Australian economy expanded for the seventh consecutive quarter, with GDP printing higher than expected.
However, the Reserve Bank of Australia’s (RBA) recent dovish rate decision and a risk-off mood stifled AUD’s upside potential.
Turning to today, a speech from outgoing Reserve Bank of Australia (RBA) Governor Philip Lowe could influence the ‘Aussie’. If he reiterates the wait-and-see stance of the central bank, AUD could slip.
New Zealand Dollar (NZD) Wavers amid Choppy Market Mood
The New Zealand Dollar (NZD) traded erratically against its rivals yesterday as a souring market weighed on the risk-sensitive ‘Kiwi’.
Looking ahead, without data to go by, the New Zealand Dollar could remain susceptible to risk sentiment. Could a gloomy mood see NZD stumble?
Pound (GBP) Undermined by Dire Economic Outlook
The Pound (GBP) remained under pressure yesterday amid mounting economic worries in the UK.
The British Chambers of Commerce (BCC) warned that the ‘fragile’ UK economy is teetering ‘on the edge of recession’, with the country facing two years of anaemic growth.
With no notable data due out for the rest of this week, the Pound could be left vulnerable to growing recession risks.
Euro (EUR) Pressured amid Further Downbeat Data
The Euro (EUR) was under pressure once more yesterday as disappointing economic data highlighted a stuttering economy.
A larger-than-expected decline in Eurozone retail sales and a drastic tumble in German factory orders sapped demand for the Euro.
Turning to today, an expected third consecutive drop in German industrial production could dent EUR. However, the Eurozone’s third estimate of second-quarter GDP growth could offset losses, if it indicates an expanding economy.
US Dollar (USD) Climbs on Strong Service Sector PMI
The US Dollar (USD) continued its rally yesterday as the ISM services PMI jumped to its highest level since February.
Economic activity in the US service sector unexpectedly accelerated in August to 54.5 rather than easing to 52.5. Growing optimism in the US economy bolstered the ‘Greenback’ amid bets on more Federal Reserve rate hikes.
Looking ahead, initial jobless claims are expected to have climbed last week. Further hints of a loosening labour market could dent the US Dollar.
Canadian Dollar (CAD) Wavers as BoC Keeps Rates Unchanged
The Canadian Dollar (CAD) was relatively quiet after the Bank of Canada (BoC) left interest rates unchanged at 5%, as expected. However, the central bank remains concerned with inflationary pressures and left the door open to further tightening.
Looking ahead, the latest Ivey PMI figures could point to a second consecutive month of shrinking business activity. Concerns over the Canadian economy could sap demand for the ‘Loonie’.
Data Releases
7th Sep 11:30 AUD Balance of Trade (Jul) AU$10bn
7th Sep 13:10 AUD RBA Gov Lowe Speech
7th Sep 16:00 EUR DE Industrial Production MoM (Jul) -0.5%
7th Sep 19:00 EUR GDP Growth Rate (Q2) 0.3%
7th Sep 22:30 USD Initial Jobless Claims (02/Sep) 234,000
8th Sep 00:00 CAD Ivey PMI s.a (Aug) 49.2