Australian dollar (AUD) supported by stronger commodity prices
The Australian dollar (AUD) rose yesterday due to strengthening commodity prices, namely Iron Ore, which is trading close to recent highs.
The ‘Aussie’ was also volatile around the latest release of inflation and employment figures out of the US, which showed an increase in inflation and unemployment in the US, sparking fears that the US may not experience a ‘soft-landing’.
Tomorrow will see the release of China’s new fiscal stimulus package, which markets will pay close attention to the size and composition of the package. A large stimulus package which aims to boost construction and infrastructure will benefit the AUD.
China will also release the latest round of consumer and producer inflation figures this weekend. Any major deviation from expectation may cause some volatility in the AUD on Monday morning.
New Zealand dollar (NZD) volatile after key US data
The New Zealand dollar (NZD) was volatile yesterday, after stronger than forecast inflation and unemployment figures were released out of the US.
Data released yesterday also showed that NZ consumers continue to eat into their savings balances, a persistent theme since mid-2022. This underscores the financial strain many households are experiencing.
Looking ahead, today’s data releases include August international travel and migration figures. Net migration is expected to continue to recede, potentially causing some headwinds for the “Kiwi’.
US dollar (USD) firms despite cooling inflation
The US dollar (USD) wavered yesterday, though it managed to gain ground overall against many of its peers.
The movement came after US inflation cooled less than expected in September, with price pressures only easing modestly from 2.5% to 2.4%.
Turning to today, the US producer price index for September could influence USD. An expected slowdown in producer price growth may weigh on the ‘greenback’.
Pound (GBP) stumbles amid fresh budget jitters
The pound (GBP) was unable to sustain its recovery yesterday as fresh fears over the UK’s looming Autumn Budget put GBP on the back foot.
Reports emerged suggesting that the government’s revenue-raising plans are in ‘complete disarray’, with less than three weeks until Chancellor Rachel Reeves unveils her budget. This rattled GBP investors, with the recent optimism quickly fading.
Today will see the release of the UK’s latest GDP figures. A strong GDP print may help strengthen the pound.
Euro (EUR) subdued despite ECB meeting minutes
The euro (EUR) was mixed yesterday, despite the European Central Bank’s (ECB) September meeting minutes proving less dovish than expected.
The accounts showed that policymakers expect to lower interest rates gradually. However, the minutes failed to dampen bets on two more rate cuts this year, in light of more recent comments from ECB officials.
Canadian dollar (CAD) falls despite stronger oil prices
The Canadian dollar (CAD) weakened yesterday, with recovering oil prices failing to lift the crude-linked ‘loonie’, as ongoing fears over the Canadian economy kept CAD on the defensive.
Looking forward, Canada’s latest jobs report is the focus for CAD investors today. If the unemployment rate rose last month, as expected, the ‘loonie’ could face notable pressure.
Data releases
16:00 EUR German Inflation Rate (Sep)
16:00 GBP GDP (Aug)
22:30 CAD Unemployment Rate (Sep)
22:30 USD PPI (Sep)
00:00 USD Michigan Consumer Sentiment (Oct)