Australian dollar (AUD) under pressure from weak Chinese trade data
The Australian dollar (AUD) was on the defensive at the end of last week as soft Chinese trade figures raised concerns about a slowdown in Australia’s largest trading partner.
Chinese exports slumped in August, causing market participants to revise down their growth outlook for China, and in turn weighing heavily on the China-exposed Australian dollar.
Looking ahead, AUD investors may remain cautious in the absence of any notable domestic data today, with the currency likely to remain sensitive to shifts in market risk appetite.
New Zealand dollar (NZD) slips amid risk aversion
The New Zealand dollar (NZD) struggled to gain any significant traction last week, with a general souring of market sentiment dragging the risk-sensitive currency lower.
This week could bring further volatility to the ‘Kiwi’ as investors look to a speech by Reserve Bank of New Zealand (RBNZ) officials, which could provide fresh clues on the bank’s future monetary policy stance.
With little data on tap today, NZD may remain vulnerable to broader market risk trends.
Pound (GBP) buoyed by BoE rate expectations
The pound (GBP) trended broadly higher against most of its major peers apart from the US dollar (USD) on Friday.
While UK economic data was in short supply, Sterling sentiment was underpinned by bets the Bank of England (BoE) will cut interest rates at a slower pace than other central banks.
Coming up, movement in the pound may be limited today as GBP investors brace for the release of the latest UK employment figures on Tuesday.
Euro (EUR) dented by revised GDP figures
The euro (EUR) closed last week on the back foot as EUR investors were dismayed by the latest Eurozone GDP release.
The latest estimate of growth in the second quarter was revised down from 0.3% to 0.2% as inflation and high interest rates limited consumer spending and investment in the bloc.
Looking ahead, investors may be reluctant to alter their positions in the euro in the first half of the week, ahead of a widely expected interest rate cut from the European Central Bank (ECB) on Thursday.
US dollar (USD) rocked by mixed US payroll report
Trade in the US dollar (USD) was erratic on Friday, following the publication of the latest US non-farm payroll figures.
A kneejerk reaction to the data sent USD exchange rates lower as payroll printed below expectations in August. However, the US dollar swiftly rebounded as USD investors welcomed a sharper-than-forecast appreciation of US wages.
Turning to this week, the US dollar may struggle to maintain its positive momentum after last week’s lacklustre US labour data tipped bets in favour of a larger 50bps interest rate cut from the Federal Reserve later this month.
Canadian dollar (CAD) slides as unemployment rises
The Canadian dollar (CAD) closed last week’s session on a sour note as a larger-than-expected increase in domestic unemployment stoked Bank of Canada (BoC) rate cut bets.
Coming up, movement in the ‘loonie’ may be tied to oil price dynamics at the start of this week, with CAD exchange rates at risk of sliding if prices soften.