Australian Dollar (AUD) Dips as Sentiment Sours
Having strengthened through the European trading session amid an upbeat mood, the risk-sensitive Australian Dollar (AUD) then slumped yesterday.
After the Federal Reserve indicated that it was open to further interest rate hikes, risk aversion swept markets, dragging the ‘Aussie’ down.
This morning, the latest Australian private sector indexes are due. Economists anticipate further weakness in both manufacturing and services, which could weaken the ‘Aussie’ over today’s trade.
New Zealand Dollar (NZD) Slides despite Strong GDP
The New Zealand Dollar (NZD) suffered the same fate as the ‘Aussie’ yesterday, with NZD retreating from recent highs as risk appetite vanished.
Stronger-than-forecast New Zealand GDP saw the ‘Kiwi’ briefly spike, but it was unable to stem the currency’s losses.
Continued analysis of this morning’s trade data may yield volatility for the ‘Kiwi’ during today’s session.
Pound (GBP) Crashes as BoE Holds Fire
The Bank of England (BoE) held rates yesterday, which sent the Pound (GBP) spiralling against most peers.
Amid a 5:4 split within the bank’s Monetary Policy Committee (MPC), speculation that the BoE may have reached its terminal rate hammered the Pound.
This afternoon, the UK’s retail sales data for August is scheduled for release. Could a 0.5% increase revitalise Sterling?
Euro (EUR) Rises on Hawkish ECB Comments
On the back of hawkish comments from European Central Bank (ECB) policymakers, the Euro (EUR) strengthened against its peers yesterday.
However, a strong showing from the US Dollar (USD) may have capped the single currency’s potential, due to their negative correlation. A speech from ECB President Christine Lagarde yielded additional volatility.
This evening, the latest Eurozone PMI data is due. Both the manufacturing and service indexes are expected to remain in contractionary territory, likely weakening EUR.
US Dollar (USD) Stifled by Profit-Taking
After the Federal Reserve enacted a hawkish pause and left the door open for future tightening, the US Dollar gathered pace early on Thursday morning.
However, with USD hitting multi-month highs against many of its rivals, some investors sought to cash in on the currency’s strength. This put a firm lid on the US Dollar.
Later tonight, the latest US private sector indexes are likely to provide direction. Any signs that the US economy remains robust could see USD hit new highs.
Canadian Dollar (CAD) Bolstered by Oil Price Rise
The commodity-linked Canadian Dollar (CAD) rose against its peers on Thursday, as oil prices recovered from their recent dip to push back above $90 per barrel.
Tonight, August’s Canadian retail sales data is due to print. If sales improved in line with forecasts, the ‘Loonie’ could climb.
Data Releases
Sep 22nd 08:45 NZD Balance of Trade (Aug) NZ$0.9bn
Sep 22nd 09:00 AUD Manufacturing PMI (Sep) 49.5
Sep 22nd 09:00 AUD Services PMI (Sep) 46.5
Sep 22nd 16:00 GBP Retail Sales (Aug) 0.5%
Sep 22nd 16:30 GBP Services PMI (Sep) 49.2
Sep 22nd 18:00 EUR Services PMI (Sep) 47.7
Sep 22nd 22:30 CAD Retail Sales (Jul) 0.4%
Sep 22nd 23:45 USD Services PMI (Sep) 50.6