Australian Dollar (AUD) Recovers despite Risk Aversion
On Monday, the risk-sensitive Australian Dollar (AUD) initially struggled to gain a foothold, due to a souring market mood after Hamas militants launched an unprecedented assault on Israel.
However, the resource-linked currency was able to regain ground and climb against its weaker peers as commodity prices climbed higher amid supply fears.
This morning, Westpac is due to release its consumer confidence data for October. Could a fall in optimism dent AUD rates?
New Zealand Dollar (NZD) Underpinned by Rising Commodity Trade
Monday saw the New Zealand Dollar (NZD) trade in a mixed capacity, due to its risk-sensitive nature.
The commodity-linked ‘Kiwi’ did manage to strengthen against some peers, as rising materials prices lifted the currency.
Looking ahead for today’s session, NZD may trade in narrow boundaries due to a light slate of releases.
Pound (GBP) Weakens amid Grim Market Mood
The Pound (GBP) slipped against many of its peers on Monday, due to a darkening market atmosphere.
As an increasingly risk-sensitive currency, Sterling was vulnerable to the bleak mood as worries about the wider implications of the Hamas-Israel war rattled investors.
Sterling’s run of minimal data continues today, which may leave it to trade without a clear direction.
Euro (EUR) Undermined by Downbeat German Data
Disappointing German industrial production data limited the Euro’s (EUR) appeal during yesterday’s trade.
Additionally, a strong showing from the US Dollar (USD) further capped the common currency, due to EUR’s negative correlation with USD.
European Central Bank (ECB) President Christine Lagarde is due to deliver a speech tonight. If she maintains the bank’s recent cautious messaging, EUR could struggle to attract support.
US Dollar (USD) Rallies as Hamas-Israel Fighting Unnerves Markets
Following a shocking escalation in the conflict between Hamas and Israel over the weekend, the safe-haven US Dollar climbed on Monday.
Investors flocked to stable assets, which prompted the ‘Greenback’ to make gains over some of its riskier peers.
If the situation in Israel continues to trouble investors, the US Dollar could gain further ground today.
Canadian Dollar (CAD) Rises as Oil Prices Soar
Oil prices surged on Monday, catapulting the crude-linked Canadian Dollar (CAD) higher, amid concerns the fresh conflict in the Middle East could lead to supply shortages.
Today, the ‘Loonie’ could continue to strengthen if oil prices remain strong.
Data Releases
Oct 10th 09:30 AUD Westpac Consumer Confidence Change (Oct) -0.7%
Oct 10th 10:30 AUD NAB Business Confidence (Sep) -2
Oct 10th 22:00 EUR ECB President Christine Lagarde Speech
Oct 10th 23:30 USD Fed Bostic Speech