Australian dollar (AUD) fluctuates amid surging commodity prices
The Australian dollar (AUD) traded in a wide range on Wednesday, after Iran launched a series of missiles at Israel.
While the attack spooked investors, AUD exchange rates spiked as commodity prices jumped. Only for the ‘Aussie’ to erase the bulk of these gains by the end of Asian session.
Coming up, Australia will publish its latest trade figures later today. If export growth continued to accelerate in August, this may help to lift the ‘Aussie’.
New Zealand dollar (NZD) mixed amid uneven market mood
Trade in the New Zealand dollar (NZD) was also erratic yesterday as the fluctuating market mood infused volatility into the risk-sensitive currency.
Looking ahead, in the absence of any notable domestic data, movement in the ‘kiwi’ is likely to remain tied to market risk appetite today.
US dollar (USD) firms on upbeat US jobs data
The US dollar (USD) was initially muted yesterday, despite uncertainty over how events are unfolding in the Middle East.
USD exchange rates then began to firm later in the afternoon after a stronger-than-expected ADP employment report helped further temper Federal Reserve interest rate cut expectations.
The release of the latest ISM services PMI will be in focus at midnight tonight. September’s index is expected to report a modest uptick in service sector activity, which may reflect positively on the US dollar.
Pound (GBP) sidelined by potential infrastructure cuts
The pound (GBP) traded in a narrow range yesterday amid fresh concern over the UK’s upcoming Autumn Budget.
This followed reports that Chancellor Rachel Reeves could introduce billions of pounds worth of infrastructure cuts, despite Labour’s pledge to invest more in order to boost economic growth.
Turning to today’s session the pound may face some modest selling pressure as September’s finalised services index is expected to confirm UK service sector growth slowed last month.
Euro (EUR) muted on growth warning
The euro (EUR) was subdued on Wednesday in the wake of comments by European Central Bank (ECB) Vice-President Luis de Guindos.
Guindos warned that ‘risks to growth are still tilted to the downside’, stoking concerns of potential headwinds facing the Eurozone economy.
The Eurozone will publish its latest producer price index later this evening. If August’s data reports producer price pressures continue to cool, it’s likely to further weaken inflation expectations and drag on the euro.
Canadian dollar (CAD) underpinned by oil price surge
The Canadian dollar (CAD) trended broadly higher on Wednesday with the commodity-linked currency drawing support from a sharp uptick in oil prices.
Looking ahead, if oil prices continue to appreciate, the ‘loonie’ may extend its gains through today’s session.
Data Releases
18:00 EUR Services PMI (Sep)
18:30 GBP Services PMI (Sep)
19:00 EUR PPI (Aug)
00:00 USD ISM Services PMI (Sep)
00:00 USD Factory Orders (Aug)