Australian dollar (AUD) mixed as retail sales flatline
The Australian dollar (AUD) moved without a clear trajectory on Friday following the latest domestic retail data.
While retail growth stalled in July, an improving market mood cushioned the risk-sensitive currency’s losses later in the day.
Looking ahead, China’s latest Caixin PMI is due for release on Monday morning. Due to AUD’s status as a proxy currency for the Chinese economy, could further contractions in the vital Chinese manufacturing sector dent the ‘Aussie’?
New Zealand dollar (NZD) dented by RBNZ rate cut speculation
A slight uptick in Reserve Bank of New Zealand (RNBZ) interest rate cut bets prevented the risk-sensitive New Zealand dollar (NZD) from climbing higher on Friday, despite positive market sentiment.
Coming up, a data-light session could leave the ‘kiwi’ vulnerable to global risk dynamics today.
Pound (GBP) falters amid UK economic concerns
The pound (GBP) was largely subdued on Friday as the Bank of England’s (BoE) latest consumer credit figures came in slightly below forecasts.
Analysts noted that decreased borrowing in July signalled a continually weak period of consumer confidence in the UK. As a result, the week’s bout of British economic pessimism served to hamper GBP exchange rates.
Turning to today, the UK’s finalised manufacturing PMI is due for release. Could confirmation of accelerating factory sector activity lift the pound?
Euro (EUR) undermined by cooling inflation
The euro (EUR) struggled to attract investor support on Friday evening as news of rapidly easing inflation in the Eurozone supported speculation that the European Central Bank (ECB) could lower interest rates next month.
However, a surprise drop in unemployment in the bloc helped to temper the single currency’s losses.
This evening, the Eurozone’s finalised manufacturing PMI is due out. Should the index sink to an eight-month low as forecast, the common currency may be left on the back foot.
US dollar (USD) firms despite inflation miss
The US dollar closed last week’s session on the front foot, despite the Federal Reserve’s preferred indicator for inflation, the US core PCE price index, printing below expectations.
This upside in the ‘greenback’ was supported by a rise in US personal spending, which eased US recession fears and tempered bets for a larger 50bps interest rate cut from the Fed this month
Today, US markets will be closed in observance of Labor Day, which could leave the ‘greenback’ muted.
Canadian dollar (CAD) strengthens amid increased growth
The Canadian dollar (CAD) firmed against the majority of its rivals on Friday amid news that the Canadian economy continued to accelerate during the second quarter.
Today, movement in the ‘loonie’ may also be subdued as markets close for a public holiday.
Data releases
2nd Sep 09:00 AUD Manufacturing PMI (Aug) 48.7
2nd Sep 18:00 EUR Manufacturing PMI (Aug) 45.6
2nd Sep 18:30 GBP Manufacturing PMI (Aug) 52.5