Australian Dollar (AUD) Crumples as RBA Leaves Rates Unchanged
The Reserve Bank of Australia (RBA) kept interest rates at 4.1% yesterday, prompting substantial weakness in the Australian Dollar (AUD).
In its accompanying forward guidance, the RBA suggested it was open to future tightening. However, as this marked the fourth consecutive hold, investors appeared to ignore this and AUD slumped.
The RBA releases its latest chart pack this morning. If it indicates a bleak outlook for the Australian economy, AUD rates may fall again.
New Zealand Dollar (NZD) Suffers amid Grim Market Mood
Tuesday’s sour market mood weighed heavily on the risk-sensitive New Zealand Dollar (NZD), weakening it against most peers.
Furthermore, pared back interest rate hike bets from the Reserve Bank of New Zealand (RBNZ) created additional headwinds.
The RBNZ is expected to keep rates as they are today, which could further dent the ‘Kiwi’ over the session.
Pound (GBP) Listless amid Lacking Data Calendar
The Pound (GBP) traded in a mixed range yesterday, as economic data was in short supply.
This left Sterling to move without a clear direction, with GBP in flux against most of its peers.
The final reading for September’s service sector PMI is due this evening. If it confirms further weakness in the sector, GBP could struggle for support.
Euro (EUR) Underpinned by Hawkish ECB Rhetoric
Hawkish remarks from European Central Bank (ECB) Chief Economist Philip Lane supported the Euro (EUR) yesterday.
However, the common currency was unable to capitalise on Lane’s comments due to the US Dollar’s (USD) continued strength.
This afternoon, ECB President Christine Lagarde is scheduled to deliver a speech. If she continues the ECB’s recent dovish outlook, EUR may weaken.
US Dollar (USD) Climbs as Job Openings and Treasury Yields Surge
Yesterday, the US Dollar consolidated its gains as US Treasury yields surged to a 16-year high.
Additionally, the latest JOLTs job openings printed significantly above forecasts at 9.61 million. The indication of a robust labour market boosted Federal Reserve rate hike bets, yielding further tailwinds for the ‘Greenback’.
Tonight, the latest ADP employment data is followed by September’s ISM services index. Between cooling employment and slowing services activity, USD could weaken.
Canadian Dollar (CAD) Dampened by Volatile Oil Prices
Volatility in oil prices capped the commodity-sensitive Canadian Dollar (CAD) during yesterday’s session, with the currency struggling to find a clear trajectory amid the turbulence.
The dearth of Canadian data is set to continue for the ‘Loonie’ today, meaning it may remain reliant on oil price dynamics.
Data Releases
Oct 4th 10:30 AUD RBA Chart Pack
Oct 4th 11:00 NZD RBNZ Interest Rate Decision 5.5%
Oct 4th 18:15 EUR ECB President Lagarde Speech
Oct 4th 18:30 GBP Services PMI Final (Sep) 47.2
Oct 4th 19:00 EUR Retail sales (Aug) -0.3%
Oct 4th 22:15 USD ADP Employment Change (Sep) 153,000
Oct 5th 00:00 USD ISM Services PMI (Sep) 53.6