Australian dollar (AUD) firms amid market optimism
The Australian dollar (AUD) strengthened yesterday as market sentiment remained positive, despite no major domestic data releases.
With no major data releases for the AUD again today, it will take movement from general risk tones in the market.
Looking ahead, the release of the latest round of manufacturing and service PMI’s tomorrow will be closely watched by the market.
New Zealand dollar (NZD) rises despite soft trade data
With no significant domestic data releases, the New Zealand dollar (NZD) climbed even as trade figures underperformed.
The monthly trade balance for September saw a deficit of $2.1 billion, a much bigger deficit than forecast.
Looking ahead, a speech by RBNZ Governor Orr on monetary policy tomorrow will be key for future NZD direction.
US dollar (USD) bolstered by rising Treasury yields
The US dollar (USD) gained support from rising US Treasury yields yesterday, with the US 10-year Treasury yield reaching 4.21%, its highest since late July.
Meanwhile, the US 2-year yield inched up to 4.03%. Investors are now awaiting the Federal Reserve’s Beige Book release and upcoming home sales data for future direction.
Pound (GBP) sinks amid lack of data
The pound (GBP) fell yesterday against its peers, in a quiet day lacking any major data releases.
A speech by Bank of England Governor Bailey, had little effect on the market as he did not comment on monetary policy as expected. He will speak again tomorrow at the Institute of International Finance, where it is expected that he will be dovish in his commentary.
With weaker than forecast inflation figures released for September, Governor Bailey may hint at further rate cuts ahead, potentially hampering the pound.
Euro (EUR) falls after dovish ECB speech
The euro (EUR) weakened yesterday after a dovish speech by ECB President Lagarde, where the market interpreted her comments to mean that further interest rate cuts are on the way for the eurozone.
Lagarde mentioned that inflation numbers in the Eurozone are currently reassuring, and hoped that they will be back at their target sooner than expected. Traders have now priced in the European Central Bank (ECB) to cut interest rates again in the December meeting.
Looking ahead, the release of important PMI figures tomorrow will be cautiously watched by the market.