Australian dollar (AUD) subdued in anxious trade
The Australian dollar (AUD) was muted on Monday as a risk-averse market mood made the currency less attractive to investors.
These risk-off flows were linked to renewed geopolitical uncertainty as tensions flared after US President Joe Biden granted Ukraine authorisation to use long-range US weapons in strikes against Russian territory.
The Reserve Bank of Australia (RBA) will publish the minutes from its latest policy meeting later today. If these reiterate the bank’s desire to maintain its restrictive monetary policy, the ‘Aussie’ may strengthen.
New Zealand dollar (NZD) slides in risk-off trade
The New Zealand dollar (NZD) stumbled during yesterday’s session amid negative risk sentiment.
With domestic data thin on the ground, movement in the ‘kiwi’ is likely to remain tied to market risk dynamics today, potentially leading to further losses if the mood remains downbeat.
Pound (GBP) muted amid Trump tariff warning
The pound (GBP) struggled to attract support at the start of this week, following a warning about the potential impact of Donald Trump’s tariffs on the UK economy.
The CEBR thinktank warned that the size of the UK economy could be reduced by almost 1% if Trump goes ahead with his plans to impose a 20% tariff on all imports.
Looking ahead, the pound may remain flat as GBP investors brace for the publication of the UK’s latest inflation figures on Wednesday.
Euro (EUR) firms in cautious trade
The euro (EUR) firmed during yesterday’s session as a downbeat market mood made the single currency more appealing to investors.
This upside in the euro was also supported by its negative correlation with the US dollar (USD).
This evening will see the publication of the Eurozone’s latest consumer price index. But barring a revision to October’s finalised figures, the impact on the euro may be negligible.
US dollar (USD) undermined by profit-taking
The US dollar was mostly subdued at the start of this week’s session in the absence of any notable US economic data.
As the ‘Trump trade’ continued to run out of steam, this also made the ‘greenback’ vulnerable to further profit-taking.
US data remains in short supply today, potentially leaving the US dollar open to further losses unless the incoming US administration does something to reignite the ‘Trump trade’.
Canadian dollar (CAD) supported by rising oil prices
The Canadian dollar (CAD) edged higher on Monday as the commodity-linked currency was underpinned by a rebound in oil prices.
Coming up, Canada’s latest CPI print is expected to report an acceleration in inflation last month. This may strengthen the ‘loonie’ later tonight as it is likely to temper Bank of Canada (BoC) rate cut bets.
Data Releases
10:30 AUD RBA Minutes
20:00 EUR Inflation Rate (Oct)
23:30 CAD Inflation Rate (Oct