Australian Dollar (AUD) Bolstered by RBA Rate Hike Bets
Outgoing Reserve Bank of Australia (RBA) Governor Philip Lowe helped buoy the Australian Dollar (AUD) yesterday with a hawkish final speech.
Lowe said that the RBA would be open to raising interest rates again if inflation proves sticky, thereby boosting rate hike bets and lifting the ‘Aussie’.
Due to a lack of data releases, the ‘Aussie’ may trade on market dynamics today. Will bearish trade weigh on AUD?
New Zealand Dollar (NZD) Supported by AUD Correlation
The New Zealand Dollar (NZD) benefitted from its close correlation to the ‘Aussie’ yesterday, strengthening in tandem with AUD.
However, these gains may have been trimmed by receding levels of risk appetite over the day’s trade.
The market mood may continue to impact the risk-sensitive ‘Kiwi’ today. If investors remain anxious, NZD could slide.
Pound (GBP) Stumbles as Investors Analyse Dovish BoE Remarks
During Thursday’s trade, the Pound (GBP) struggled to attract support as investors continued to readjust their bets for more policy tightening from the Bank of England (BoE).
Following dovish comments from BoE Governor Andrew Bailey on Wednesday, Thursday brought fresh signs of easing inflation and a slowing economy, which further weighed on BoE bets.
With data in short supply today, Sterling may remain on the defensive amid economic worries and dwindling rate hike bets.
Euro (EUR) Slides as Q2 GDP Revised Lower
The Euro (EUR) weakened against most peers on Thursday, following a shock downward revision in the Eurozone’s second-quarter GDP growth rate.
The reading was revised down from 0.3% to 0.1%, which sparked recession anxieties as the bloc’s economy suffers sluggish growth.
Later today, the final print of Germany’s August inflation data is due to print. Confirmation of cooling inflation in the bloc’s largest economy could dent EUR rates.
US Dollar (USD) Rallies as Jobless Claims Fall
Falling jobless claims sent the US Dollar (USD) soaring yesterday, as signs of a tight labour market left room for further hikes from the Federal Reserve.
Furthermore, a progressively souring market mood brought safe-haven flows to the ‘Greenback’, lifting it above riskier assets.
This afternoon, Fed Official Michael Barr is scheduled to speak. If he delivers a hawkish stance, USD could climb.
Canadian Dollar (CAD) Unmoved by Surprise Ivey PMI Growth
Despite Canadian business activity unexpectedly returning to growth in August, according to the latest Ivey PMI, the Canadian Dollar (CAD) was mixed during overnight trade.
This evening, August’s unemployment rate is scheduled for publication. Economists anticipate an increase from 5.5% to 5.6%, which may weaken the ‘Loonie’.
Data Releases
Sep 8th 15:00 USD Fed Barr Speech
Sep 8th 16:00 EUR DE Inflation Rate Final (Aug) 6.1%
Sep 8th 22:30 CAD Unemployment Rate (Aug) 5.6%