Australian dollar (AUD) bolstered by China stimulus speculation
The Australian dollar (AUD) rallied at the end of last week, underpinned by renewed hopes for more stimulus from China.
Markets speculated that China’s weakest GDP figures since early 2023 may spur Beijing to do more to shore up its economy.
While AUD data is in short supply today, the ‘Aussie’ may maintain a positive trajectory so long as nothing dampens hopes for more Chinese fiscal support.
New Zealand dollar (NZD) firms in optimistic trade
The New Zealand dollar (NZD) also trended higher on Friday, supported by the positive shift in risk appetite amid China stimulus optimism.
Looking ahead, movement in the ‘kiwi’ is likely to remain tied to market risk dynamics at the start of this week.
Pound (GBP) buoyed by positive retail sales print
The pound (GBP) closed last week’s session on a positive note, following the release of the UK’s latest retail sales data.
While September’s data reported sales growth slowed from 1% to 0.3% in September, this outpaced forecasts for a 0.3% contraction.
Meanwhile, a lull in UK data could leave Sterling directionless at the start of this week’s session.
Euro (EUR) buoyed by USD weakness
The euro (EUR) edged higher on Friday, with the single currency clawing back some of the losses which followed the European Central Bank’s (ECB) interest rate cut on Thursday.
This rebound in the euro appeared primarily driven by its negative correlation with the US dollar (USD), which stumbled on Friday.
Coming up, Germany’s latest producer price index could weigh on the euro later this evening if it shows that producer inflation continued to cool in September.
US dollar (USD) slips in risk-on trade
The US dollar ended last week’s session on the back foot as the broadly positive market mood sapped the appeal of the safe-haven currency.
Helping to limit the dollar’s losses, however, was a modest uptick in US Treasury yields.
Turning to today’s session, in the absence of any notable US economic data, the US dollar may struggle to find momentum, particularly if risk appetite remains buoyant.
Canadian dollar (CAD) undermined by sliding oil prices
The Canadian dollar (CAD) also retreated on Friday as the commodity-linked currency was undermined by a softening of oil prices.
Expect to see the ‘loonie’ extend these losses if oil prices continue to decline at the start of this week.
Data releases
16:00 EUR German PPI (Sep)