Australian dollar (AUD) buoyed by upbeat trade
The Australian dollar (AUD) was unfazed by some underwhelming PMI data yesterday, as an upbeat mood boosted the risk-sensitive currency.
Despite a contraction in Australian factory activity and weaker growth in the services sector, the ‘Aussie’ rose against its safer rivals.
With Australian data in short supply today, risk appetite could continue to drive most movement in AUD exchange rates.
New Zealand dollar (NZD) supported by RBNZ comments
The New Zealand dollar (NZD) enjoyed support yesterday amid the risk-on mood and comments from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr.
Orr said that policymakers were wary of lingering inflation and suggested the bank could take a more ‘circumspect’ approach with regards to future interest rate cuts.
New Zealand’s latest consumer confidence index, published earlier this morning, could continue to influence NZD today. Risk sentiment could also impact the ‘kiwi’ as the session unfolds.
Pound (GBP) rebounds amid budget optimism
The pound (GBP) rallied yesterday, shrugging off a surprisingly weak services PMI, amid hopes that the UK Autumn Budget would boost investment.
Reports that Chancellor Rachel Reeves would change the government’s fiscal rules to allow her to borrow up to £50bn in the upcoming budget cheered GBP investors, with the plans being backed by banking giants Lloyds and Barclays.
If budget optimism continues today, Sterling could enjoy support through to the end of the session.
Euro (EUR) falls amid risk-on sentiment
The safer euro (EUR) fell against its riskier rivals yesterday amid an upbeat market mood.
Lacklustre PMI surveys failed to support EUR during the European session, although the euro’s negative correlation with a weakening US dollar cushioned the currency’s downside.
Later this evening, EUR may struggle to attract support if Germany’s business climate indicator remains close to the eight-month low hit in September.
US dollar (USD) falls amid improving market mood
The US dollar retreated from recent highs yesterday as an increased appetite for risk undermined the safe-haven ‘greenback’.
In addition, a pullback in US Treasury yields added to the US dollar’s woes.
Looking ahead, the ‘greenback’ could end the week on a sour note as the latest US durable goods orders release is forecast to show a 0.9% contraction in September.
Canadian dollar (CAD) struggles in wake of BoC rate cut
The Canadian dollar (CAD) softened yesterday as the Bank of Canada’s (BoC) bumper 50bps interest rate cut on Wednesday night continued to pressure the currency.
Canadian retail sales could impact CAD tonight. Although August’s figure is expected to show a slowdown in sales growth, the predicted 0.5% rise could still support the ‘loonie’.
Data releases
07:00 NZD ANZ Roy Morgan Consumer Confidence (Oct)
18:00 EUR German Ifo Business Climate (Oct)
22:30 CAD Retail Sales (Aug)
22:30 USD Durable Goods Orders (Sep)
00:00 USD Michigan Consumer Sentiment (Oct)