Australian Dollar (AUD) Declines as Employment Slows
The Australian Dollar (AUD) slumped yesterday after weaker-than-forecast jobs data dented Reserve Bank of Australia (RBA) interest rate hike bets.
The latest labour report showed a 39,900 drop in full-time employment, signalling that the jobs market is cooling.
Turning to today, the ‘Aussie’ ends the week with a quiet data calendar. The market mood may therefore drive AUD movement, with the risk-sensitive currency potentially weakening if the tone remains downbeat.
New Zealand Dollar (NZD) Falls amid Souring Mood
The New Zealand Dollar (NZD) also suffered losses yesterday, hitting an 11-month low against the US Dollar (USD), as risk aversion gripped markets.
Anxiety around the escalating conflict in the Middle East saw investors dash for safer assets, undermining the risk-sensitive ‘Kiwi’ in the process.
New Zealand’s latest trade data, released earlier this morning, may continue to influence movement today. Risk appetite will also likely remain a key factor driving NZD exchange rates.
Pound (GBP) Uncertain amid Lack of Data
The Pound (GBP) faced mixed movement yesterday, as a lack of new economic data left the currency to trade without a clear direction.
Worries about a recession put some pressure on the Pound, while the possibility of another Bank of England (BoE) interest rate hike limited losses.
Later this afternoon, the UK’s retail sales data for September could dent Sterling. Economists expect to see sales growth decline by 0.2%.
Euro (EUR) Climbs amid Risk-Off Trade
The Euro (EUR) rallied yesterday, with the safer single currency catching bids amid widespread risk aversion.
In addition, a pullback in the US Dollar also aided EUR, due to the currencies’ strong negative correlation.
The only Eurozone data of note today will be Germany’s latest producer price index. Will signs of an acceleration in PPI boost EUR?
US Dollar (USD) Sheds Gains as Treasury Yields Decline
The safe-haven US Dollar initially strengthened yesterday amid a risk-off market mood.
However, USD relinquished a large portion of its gains during European trade due to a pullback in US Treasury yields.
Looking forward, US data is in short supply today. As a result, the ‘Greenback’ may trade on market risk dynamics.
Canadian Dollar (CAD) Slips as Oil Prices Drop
The crude-linked Canadian Dollar (CAD) softened yesterday as a dip in oil prices dented CAD exchange rates. News that the US was lifting oil sanctions on Venezuela pulled crude prices lower.
An expected contraction in Canadian retail sales could dent CAD today. Forecasters expect domestic sales to have shrunk 0.3% in August.
Data Releases
October 20th 16:00 EUR PPI (Sep) 0.4%
October 20th 16:00 GBP Retail Sales (Sep) -0.2%
October 20th 22:30 CAD Retail Sales (Aug) -0.3%