Australian dollar (AUD) rises on further Chinese stimulus
The Australian Dollar (AUD) gained yesterday due to further stimulus measures announced by the Chinese government. China announced a raft of new measures aimed at boosting the slowing Chinese economy.
Job vacancies also announced yesterday dropped by 5.2% over the three months leading up to August, leaving vacancies 32% below their peak in 2022. This signals a cooling in labour demand, and maintaining a low unemployment rate will be difficult if job vacancies continue to decline rapidly.
With no notable data releases today, the ‘Aussie’ will likely take movement from general risk tones in the market.
New Zealand dollar (NZD) advances after risk-on mood
The New Zealand dollar (NZD) advanced yesterday, with the risk-on mood impacting demand for the ‘Kiwi’. The new stimulus pledges by the Chinese authorities gave risk assets including the NZD a boost.
The September consumer confidence report will be released this morning, with expectations of a slight improvement, though from a low base. Despite some relief from income tax cuts and lower interest rates, consumers are likely to remain cautious due to ongoing economic uncertainty and a softening labour market.
US dollar (USD) slumps on Fed rate cut bets
The US dollar retreated through yesterday’s session amid rising expectations the Federal Reserve will deliver another bumper 50bps interest rate cut when it next meets in November.
The USD selling bias remained in place despite some positive US economic releases in the afternoon, with durable goods orders and initial jobless claims beating expectations and US GDP confirmed to have risen to 3% in the second quarter.
Turning to today’s session, the spotlight will be on the latest core PCE price index. A rise in the Federal Reserve’s preferred indicator for inflation could trim bets for another 50bps rate cut and help to lift the US dollar.
Pound (GBP) strengthens in risk-on trade
The pound (GBP) trended broadly higher on Thursday as the currency was underpinned by improving market sentiment.
However, Sterling’s upside potential was ultimately limited by a report from the British Retail Consortium suggesting that UK consumer confidence was in decline due to concerns over the upcoming Autumn Budget.
Looking ahead, the Confederation of British Industry (CBI) will publish its latest distributive trades index later today. If September’s index reports retail sales volumes continue to contract, the pound may weaken.
Euro (EUR) weakens in risk-positive trade
The euro (EUR) slipped yesterday, as the improvement in market risk appetite limited demand for the safe-haven single currency.
Helping to temper these losses, however, was Germany’s latest consumer confidence index, as sentiment going into October was slightly better than expected.
This morning sees the publication of the Eurozone’s latest economic sentiment index. Expect the euro to come under pressure if a decline in morale raises concerns over the bloc’s economic trajectory.
Canadian dollar (CAD) pressured by sliding oil prices
The Canadian dollar (CAD) stumbled on Thursday as the commodity-sensitive currency softened in tandem with global oil prices.
Coming up, Canada’s latest GDP figures may apply additional pressure to the ‘loonie’ this evening if they show that growth remained anaemic through July and August.
Data releases
19:00 EUR Economic Sentiment (Sep)
20:00 GBP CBI Distributive Trades (Sep)
22:30 CAD GDP (Aug)
22:30 USD Core PCE Price Index (Aug)