AUD
The Australian dollar remained firm overnight, following the release of the US inflation report for October which showed falling headline inflation, spurring on risk assets and the AUD.
This morning’s release of unemployment figures has slightly hampered the ‘Aussie’, as the unemployment rate rose slightly to 3.7%. The market will likely continue to react on the back of these figures throughout the day, as it attempts to interpret whether the RBA will likely hike the cash rate further, or whether we have reached the end of the hiking cycle.
The release of the minutes of the November’s Monetary Policy Meeting is the next big release on the calendar, on Tuesday next week.
GBP
The Pound tumbled overnight after the release of Octobers monthly inflation figures showed the inflation rate dropping sharply from 6.7%/yr to 4.6%/yr, to its lowest level in two years.
The market now expects that no further interest rate increases will be required by the BOE, and the next rate move will be a cut in 2024, hurting the Pound’s strength.
USD
The dollar strengthened against some of its peers overnight as Treasury yields rose, recouping some of yesterday’s losses. However, weaker than expected PPI and CPI inflation figures were also released, which have further fueled the narrative of the US achieving a soft-landing.
Unemployment claims tonight, will be closely watched, as the market attempts to dissect the next for the Fed. A higher-than-expected unemployment number could hurt the Dollar.
NZD
The Kiwi has weakened slightly overnight, after the strength shown yesterday. With no major data releases due for the rest of the week, the NZD will likely take movement on the back of offshore data from the US, and general risk appetite in the market.
EUR
German inflation cooled in September alongside a larger-than-expected contraction in Eurozone retail sales. The bleak readings served to undermine EUR exchange rates.
European Central Banks President Lagarde’s speech will be closely monitored tonight, as the market attempts to interpret the next move for the ECB.