Australian dollar (AUD) muted in uneven trade
The Australian dollar (AUD) struggled to find momentum through Friday’s trading session.
A mixed market mood coupled with the absence of any notable domestic data left investors hesitant to drive the currency decisively in either direction.
Turning to the start of this week, the ‘Aussie’ may receive a boost if Australia’s latest retail sales figures report an acceleration in sales growth in October.
New Zealand dollar (NZD) bolstered by a rise in consumer morale
The New Zealand dollar (NZD) closed last week’s session on a positive note, after November’s consumer confidence index exceeded expectations, with domestic morale climbing to its highest level in three years.
New Zealand data is thin on the ground at the start of this week, which could limit the potential for the ‘kiwi’ to build on Friday’s gains.
Pound (GBP) flat following BoE stability report
The pound (GBP) was left to trade without a strong directional bias on Friday as GBP investors digested the Bank of England’s (BoE) latest Financial Stability Report.
The BoE reported that while risks to the global economy are rising, household finances in the UK remain fairly resilient.
Coming up, the UK will publish its latest manufacturing PMI later today. But barring a notable revision to November’s finalised figures, its impact on Sterling may be negligible.
Euro (EUR) steady as Eurozone inflation rises
The euro (EUR) was stable at the end of last week’s session, following the release of the Eurozone’s latest consumer price index.
While November’s preliminary figures showed that Eurozone inflation accelerated to a four-month high, analysts suggested it was unlikely to dissuade the European Central Bank (ECB) from pursuing an interest rate cut next month.
EUR investors will look to a speech by ECB President Christine Lagarde for fresh impetus today. If she strikes a dovish tone, the euro may fall.
US dollar (USD) struggles amid thin trading conditions
The US dollar (USD) was muted on Friday, with the currency struggling to find support amid subdued market activity due to holiday-thinned trading conditions.
Further undermining the appeal of the ‘greenback’ was a decline in US Treasury yields.
The focus at the start of this week is likely to be on the latest ISM manufacturing PMI, with the US dollar potentially coming under pressure if US factory sector growth continued to contract in November.
Canadian dollar (CAD) dented by cooling GDP
The Canadian dollar (CAD) was subdued at the end of last week’s session as Canada’s latest GDP figures reported a slowdown in economic growth in the third quarter.
In the absence of any notable Canadian data at the start of this week, we are likely to see movement in the ‘loonie’ tied to oil price dynamics. Will a softening of oil prices drag CAD exchange rates lower?
Data Releases
10:30 AUD Retail Sales (Oct)
19:00 EUR Manufacturing PMI (Nov)
19:30 GBP Manufacturing PMI (Nov)
20:00 EUR ECB President Lagarde Speech
01:00 USD ISM Manufacturing PMI (Nov)