Australian Dollar (AUD) Rises despite Bearish Trade
During yesterday’s session, the Australian Dollar (AUD) marched higher as investors moved to reprice it after a three-day losing streak.
The risk-off market impulse appeared to do little to prevent the risk-sensitive ‘Aussie’ from gaining ground, although it may have capped AUD’s upside.
This morning, the Reserve Bank of Australia’s (RBA) latest meeting minutes are due for release. Will a broadly dovish tone dent AUD?
New Zealand Dollar (NZD) Climbs as Service Sector Returns to Expansion
September’s services NZ PSI smashed forecasts at the start of yesterday’s session, catapulting the New Zealand Dollar (NZD) higher.
The reading printed at 50.7, snapping a three-month streak of contraction in the sector. However, NZD’s gains were capped by a negative accompanying report, which highlighted cost-of-living issues as a significant thorn in the side for the New Zealand economy.
The ‘Kiwi’ is likely to see volatile trade today, as investors pore over New Zealand’s third-quarter inflation data.
Pound (GBP) Muddled by Unclear BoE Messaging
Monday saw the Pound (GBP) waver against most peers over the course of the session.
Mixed comments from Bank of England (BoE) Chief Economist Huw Pill appeared to scupper Sterling. In a speech, Pill indicated that while rate cuts were off the cards, further hikes seemed unlikely.
August’s wage data is likely to drive movement for Sterling today. If wage growth remains sticky as expected, GBP could rally amid renewed BoE rate hike bets.
Euro (EUR) Bolstered by Weaker USD
The Euro (EUR) was buoyed yesterday by the currency’s negative correlation with a retreating US Dollar (USD).
An expanding Eurozone trade surplus may have also helped EUR against its peers yesterday. However, the data printed significantly below forecasts, which served to trim the common currency’s gains.
The Euro may struggle to attract support today, if October’s German ZEW economic sentiment index remains deeply negative.
US Dollar (USD) Undermined by Lack of Data
Owing to a quiet data calendar, the safe-haven US Dollar was unable to gain ground during Monday’s session.
Recent dovish comments from Federal Reserve officials saw investors adjust their expectations for further policy tightening. These declining bets served to weigh on the ‘Greenback’.
Tonight, September’s US retail sales data is scheduled to print. While a 0.3% increase is forecast, this may reflect slowing consumer spending and weigh on USD rates.
Canadian Dollar (CAD) Wobbles as Oil Prices Dip
The crude-linked Canadian Dollar (CAD) saw mixed trade yesterday, as oil prices weakened during the session.
September’s inflation data is set to print tonight. Economists forecast a hold at 4%, which may boost Bank of Canada (BoC) tightening bets and lift the ‘Loonie’.
Data Releases
Oct 17th 10:30 AUD RBA Meeting Minutes
Oct 17th 16:00 GBP UK Wage Growth (Aug) 7.8%
Oct 17th 19:00 EUR DE ZEW Economic Sentiment Index (Oct) -9.3
Oct 17th 22:30 CAD Inflation Rate (Sep) 4%
Oct 17th 22:30 USD Retail Sales (Sep) 0.3%