Australian dollar (AUD) rallies on China stimulus hopes
The Australian dollar (AUD) soared yesterday following China’s announcement of looser monetary policy and more ‘proactive’ fiscal policy next year.
In addition, a risk-on mood and rising commodity prices boosted the ‘Aussie’.
Today, the Reserve Bank of Australia’s (RBA) interest rate decision is the focus. With no change to policy expected, any hints that the bank may be considering an earlier start to next year’s expected rate-cutting cycle could weigh on AUD.
New Zealand dollar (NZD) climbs as sentiment improves
The New Zealand dollar (NZD) also rallied yesterday, after an initial wobble, amid the improving market mood.
Today, NZD could trade in tandem with its Australian counterpart amid a lack of New Zealand data.
Pound (GBP) uncertain amid lack of data
The pound (GBP) was mixed yesterday as a lack of UK data left the currency trading without a clear direction.
This saw the increasingly risk-sensitive pound slip against its riskier rivals while rising elsewhere.
UK data remains in short supply today, potentially leaving the pound to trade without a clear direction once again.
Euro (EUR) subdued in risk-positive trade
The safer euro (EUR) slipped against its stronger counterparts yesterday amid the risk-on mood.
However, EUR was cushioned by its negative trading relationship with the falling US dollar (USD).
The only Eurozone data due out today is Germany’s final inflation rate for November. Barring a revision to the preliminary estimate, its impact on the euro may be negligible.
US dollar (USD) falls amid upbeat mood
The US dollar struggled yesterday, with a risk-on mood dampening demand for the safe-haven ‘greenback’.
USD was also undermined by a slight increase in bets on a 25bps interest rate cut from the Federal Reserve this month.
US data remains absent from the calendar today, potentially leaving the ‘greenback’ to be driven by market risk dynamics.
Canadian dollar (CAD) mixed on USD and oil correlations
The Canadian dollar (CAD) was mixed yesterday. CAD’s correlation with USD pulled the currency lower, while rising oil prices supported the crude-linked ‘loonie’.
With Canadian data once again thin on the ground, oil price dynamics could drive the Canadian dollar today.
Data releases
10:30 AUD NAB Business Confidence (Nov)
13:30 AUD RBA Interest Rate Decision
17:00 EUR German Inflation Rate (Nov)