Australian dollar (AUD) dented by negative risk sentiment
The Australian dollar (AUD) initially trended lower at the end of last week’s session as a downbeat market mood sapped demand for the risk-sensitive currency.
The ‘Aussie’ was then able to claw back some of these losses through the European trading session as a pullback in the US dollar (USD) helped revive risk appetite.
In the absence of any notable domestic data, it’s likely market risk appetite will drive movement in the Australian dollar today. Will a cautious mood trigger another fall in AUD exchange rates?
New Zealand dollar (NZD) slides as consumer confidence wanes
The New Zealand dollar (NZD) tumbled to multi-month lows on Friday as risk-off flows and an unexpected decline in New Zealand consumer confidence weighed on NZD.
With NZD data thin on the ground, it’s likely that movement in the ‘kiwi’ will also be tied to market risk dynamics today.
Pound (GBP) stable amid budget hopes
The pound (GBP) edged higher at the end of last week’s session as recent jitters over the UK’s looming Autumn Budget appeared to dissipate.
Having won the backing of banking giants Lloyds and Barclays, it appears that concerns that Chancellor Rachel Reeves could cause a ‘mini-budget’ style meltdown have almost entirely evaporated.
The Confederation of British Industry will publish its latest distributive trades index later today. However, its impact on the pound may be negligible as GBP investors err on the side of caution ahead of Wednesday’s budget announcement.
Euro (EUR) muted amid ECB rate cut bets
The euro (EUR) was mostly rangebound at the end of last week, amid growing European Central Bank (ECB) interest rate cut expectations.
Following on from Thursday’s lacklustre Eurozone PMIs, EUR investors are growing increasingly confident the ECB will cut rates again when it next meets in December.
EUR data is in short supply at the start of this week, which may leave the euro to trade without direction through today’s session.
US dollar (USD) stumbles on weak data
The US dollar closed last week’s session on the back foot, following the publication of the latest US durable goods orders data.
These reported that goods orders shrank by 0.8% in September. While this was slightly ahead of the 1% contraction forecast, order growth in August was also revised down from 0% to -0.8%.
Looking ahead, movement in the US dollar may be limited today as USD investors brace for several high-impact US data releases later in the week.
Canadian dollar (CAD) falls in tandem with USD
The Canadian dollar (CAD) fell at the end of last week’s session, as the currency’s positive correlation with the US dollar dragged on the ‘loonie’.
Later this evening, Bank of Canada (BoC) Governor Tiff Macklem is due to speak. Could dovish comments in the wake of last week’s 50bps rate cut see CAD slide?
Data releases
19:30 CAD BoC Macklem Speech
21:00 GBP CBI Distributive Trades (Oct)