Australian Dollar Volatile amid Shifting Market Mood

Australian Dollar (AUD) Cushioned by RBA Comments

The Australian Dollar (AUD) initially weakened yesterday as a downbeat market mood weighed on the risk-sensitive currency.

An improving market mood and hawkish comments from Reserve Bank of Australia (RBA) Governor Michele Bullock helped AUD rally in the evening. But the ‘Aussie’ was ultimately unable to sustain its upside.

Turning to today’s session, could an ongoing contraction in Australian business activity see AUD exchange rates weaken?

New Zealand Dollar (NZD) Falls amid Risk-Off Trade

The New Zealand Dollar (NZD) fluctuated lower during yesterday’s session, due to the decline in market risk appetite.

The gloomy mood followed the Federal Reserve’s meeting minutes, which were more hawkish than anticipated.

This morning, a lack of New Zealand economic data could leave the ‘Kiwi’ to trade on risk appetite once again.

Pound (GBP) Retreats as Autumn Statement Disappoints

After initially ticking higher, the Pound (GBP) then stumbled as measures designed to ‘turbo-charge growth’ in the UK Autumn Statement seemed to fall short of expectations.

Meanwhile, the Office for Budget Responsibility’s (OBR) accompanying report was rather downbeat. The OBR now forecasts higher unemployment and slower growth than it did back in March.

Looking forward, the UK’s preliminary PMI surveys for November are out this evening. Another dire reading could see Sterling slide.

Euro (EUR) Stifled by Financial Stability Risks

The Euro (EUR) initially struggled during yesterday’s European session after the European Central Bank (ECB) warned that weak growth and higher interest rates were a risk to financial stability.

However, EUR was able to regain ground against its weaker peers later on, despite its negative correlation with a rising US Dollar (USD).

The Eurozone’s PMI results are also due out later on. Fresh evidence that the bloc’s economy remains weak could weigh heavily on EUR.

US Dollar (USD) Rises as Jobless Claims Drop

The US Dollar enjoyed modest support yesterday in the wake of the Fed’s meeting minutes, which struck a more hawkish tone than many had expected.

USD then extended its upside during overnight trade in response to the latest US jobless claims figure, which dropped far more than forecast.

With US data in short supply today, risk appetite could drive most movement in the safe-haven ‘Greenback’.

Canadian Dollar (CAD) Mixed as Oil Slips and USD Climbs

The crude-linked Canadian Dollar (CAD) traded without a clear direction yesterday, as a drop in oil prices was offset by the strength of the US Dollar, as CAD is positively correlated with USD.

Oil price dynamics may continue to drive CAD exchange rates today in the absence of any market-moving Canadian data.

Data Release

Nov 23rd 08:00 AUD Services PMI (Nov) 48.5

Nov 23rd 08:00 AUD Manufacturing PMI (Nov) 47.5

Nov 23rd 19:00 EUR Services PMI (Nov) 48.1

Nov 23rd 19:00 EUR Manufacturing PMI (Nov) 43.4

Nov 23rd 19:30 GBP Services PMI (Nov) 49.5

Nov 23rd 19:30 GBP Manufacturing PMI (Nov) 45

Nov 23rd 22:30 EUR ECB Monetary Policy Meeting Accounts