Australian dollar (AUD) flat as risk appetite softens
The Australian dollar (AUD) traded in a narrow range on Wednesday, with the currency’s recent bullish run coming to an end as market risk appetite waned.
This came as investors began to err on the side of caution ahead of some high-impact events in the second half of the week.
Australia will publish its latest PMI figures later this morning. Expect to see the ‘Aussie’ come under pressure if August’s preliminary figures report that Australia’s private sector continues to contract.
New Zealand dollar (NZD) slips as consumer spending weakens
The New Zealand dollar (NZD) ticked lower during yesterday’s session as NZD investors were dismayed by another fall in domestic credit card spending in July.
NZD data is in short supply today, likely leaving movement in the ‘kiwi’ to be dictated by market risk dynamics. Will a cautious mood see investors shun the New Zealand dollar?
Pound (GBP) undermined by borrowing concerns
The pound (GBP) struggled to find any meaningful gains on Wednesday after the UK reported government borrowing was twice as high as expected last month.
The disappointing borrowing figures raised concerns that Chancellor Rachel Reeves may raise taxes and cut spending when she delivers her first budget in October.
In the meantime, the UK’s latest PMIs may drive movement in the pound today. Expect to see Sterling strengthen if UK service sector growth accelerated as expected this month.
Euro (EUR) muted amid lull in data
The euro (EUR) was left directionless yesterday, amid a lull in notable Eurozone economic data.
The uneven market mood also offered limited support to the single currency.
Coming up, the Eurozone will also release its latest PMI figures this evening, with EUR exchange poised to soften if they report the bloc’s private sector all but stalled in August.
US dollar (USD) weakens on weak UK labour figures
The US dollar continued to retreat through Wednesday’s session, with the currency’s losses initially being triggered by a startling downwards revision to US non farm payrolls between April 2023 and March 2024.
The release of minutes from the Federal Reserve’s latest policy meeting then caused the ‘greenback’ to extend these losses as they strongly hinted at a September interest rate cut.
Looking ahead, movement in the US dollar may be limited through today’s session as USD investors brace for the start of the Fed’s annual Jackson Hole symposium later this afternoon.
Canadian dollar (CAD) muted as oil prices stall
The Canadian dollar (CAD) was trapped in a narrow range yesterday as a stalling of oil prices limited demand for the commodity-linked currency.
The ‘loonie’ is likely to continue to trade in relation to oil price movements today, potentially leaving the currency sidelined if prices remain flat.