Australian Dollar (AUD) Unaided by Increasing Inflation Expectations
The risk-sensitive Australian Dollar (AUD) sank on Thursday, despite an uptick in consumer inflation expectations.
The reading did little to inspire ‘Aussie’ investors, leaving the currency to weaken as the market mood soured.
With data in short supply, AUD could trade listless over today’s session.
New Zealand Dollar (NZD) Slides as Food Inflation Cools
September’s food inflation data showed a cooldown yesterday, weakening the New Zealand Dollar (NZD).
The data saw markets scale back interest rate hike bets, as the Reserve Bank of New Zealand (RBNZ) is likely to keep rates held. Over the day’s trade, a shift towards bearish trade brought further headwinds to NZD.
Over today’s session, the ‘Kiwi’ may see volatile trade as investors pore over September’s Business NZ PMI.
Pound (GBP) Muted amid Underwhelming GDP Data
While August’s GDP data printed in line with expectations, the Pound (GBP) was unable to capitalise on a return to growth.
Analysis indicated that the UK may still fall into recession in the third quarter, as July’s data was revised lower. Furthermore, signs of slowness in the economy prompted investors to pare back Bank of England (BoE) rate hike bets.
Macroeconomic releases are few and far between for Sterling today, which could limit GBP’s movements.
Euro (EUR) Wavers amid Dovish Split amongst ECB
The Euro (EUR) traded in a mixed capacity yesterday, amid signs of a growing divide in the European Central Bank (ECB).
Dovish comments from ECB policymaker Villeroy de Galhau initially tempered EUR, followed by mixed signals from the latest ECB meeting minutes. As the session progressed, the US Dollar (USD) gathered pace, weighing on EUR due to the currency’s negative correlation.
The common currency may struggle to attract support later, if Eurozone industrial production data indicates a weak recovery. Additionally, ECB President Christine Lagarde’s speech tonight could bring fresh volatility.
US Dollar (USD) Boosted by Hotter-than-Forecast Inflation
After starting Thursday’s session quietly, the US Dollar spiked following the publication of September’s inflation data.
Headline inflation held at 3.7%, above forecasts of a cooldown to 3.6%. By indicating sticky inflationary pressures, the release prompted renewed Federal Reserve rate hike bets, bringing strength to USD.
Tonight, the Michigan consumer sentiment index is due to print. Economists anticipate a decrease in household optimism, which could dent the US Dollar.
Canadian Dollar (CAD) Strengthens as Oil Prices Rise
The crude-linked Canadian Dollar (CAD) climbed on Thursday, as oil prices climbed throughout the session.
Amid a lack of data, the ‘Loonie’ may rely on oil price dynamics to gain ground once again.
Data Releases
Oct 13th 19:00 EUR Industrial Production (Aug) 0.1%
Oct 13th 23:00 EUR ECB President Lagarde Speech
Oct 13th 23:00 USD Fed Harker Speech
Oct 14th 00:00 USD Michigan Consumer Sentiment (Oct) 67.2