US Dollar Rallies despite Cooling Core Inflation

Australian Dollar (AUD) Underpinned by Strong Commodity Prices

Thursday saw the Australian Dollar (AUD) initially gain ground as robust commodities trade underpinned the ‘Aussie’.

This allowed AUD to shrug off poor Chinese economic data, climbing against some peers. However, a tepid market mood served to cap the currency’s gains.

Australian data releases are few and far between today, which could limit AUD exchange rates.

New Zealand Dollar (NZD) Rallies as Business Optimism Increases

A significant improvement in New Zealand business confidence supported the New Zealand Dollar (NZD) on Thursday.

Business optimism increased notably in November, with the ANZ index rising to 30.8. The result indicates growing hopes for a ‘soft landing’ as the Reserve Bank of New Zealand’s (RBNZ) tightening cycle nears its end.

Looking ahead, the ‘Kiwi’ may see volatility today as investors analyse the morning’s consumer confidence data.

Pound (GBP) Drops amid Light Data Calendar

Owing to a continued lack of data, the Pound (GBP) weakened against most peers yesterday.

The absence of economic releases left Sterling to trade on market dynamics, with a cautious atmosphere dampening GBP demand.

The lull in releases is set to continue today, which may prevent GBP from finding its footing.

Euro (EUR) Slides as Inflation Decelerates Significantly

Both core and headline inflation cooled more than forecast in November, denting the Euro (EUR) during Thursday’s session.

Investors began to entertain interest rate cuts from the European Central Bank (ECB), as inflation decelerated closer to the bank’s 2% target.

ECB President Christine Lagarde is scheduled to speak tonight. If she tries to push back on rate cut speculation, EUR may strengthen.

US Dollar (USD) Rises despite Cooling Core Inflation

Cautious trade saw the safe-haven US Dollar (USD) strengthen during yesterday’s session, despite a cooldown in the core PCE price index.

As expected, the Federal Reserve’s preferred inflation gauge cooled from 3.7% to 3.5%. However, the sour market mood and falling jobless claims allowed USD to remain elevated against its peers.

Overnight, the ISM manufacturing PMI is due to print. The index is expected to show an improvement in activity, but USD may be limited if it remains in contraction territory.

Canadian Dollar (CAD) Rises as OPEC Cuts Oil Production

Despite a shock contraction in Canada’s third-quarter GDP, the Canadian Dollar (CAD) strengthened yesterday. Following OPEC’s announcement of further oil production cuts, oil prices rocketed which lifted the crude-linked ‘Loonie’.

Tonight, the ‘Loonie’ could weaken if Canadian unemployment increased in November as forecast.

Data Releases

Dec 1st 07:00     NZD       ANZ Roy Morgan Consumer Confidence (Nov) 88.9
Dec 1st 21:30      EUR       ECB President Lagarde Speech
Dec 1st 23:30      CAD       Unemployment Rate (Nov) 5.8%
Dec 2nd 01:00    USD       ISM Manufacturing PMI (Nov) 47.6