Australian dollar (AUD) falls as confidence deteriorates
The Australian dollar (AUD) slumped yesterday after the latest domestic consumer confidence index unexpectedly deteriorated.
In addition, a souring market mood put pressure on the risk-sensitive ‘Aussie’.
Turning to today, Westpac’s latest leading index could support AUD, if it indicates a positive trajectory for the Australian economy.
New Zealand dollar (NZD) weakens amid risk aversion
The New Zealand dollar (NZD) also fell yesterday, with the decline in AUD and a risk-off sentiment putting pressure on the ‘kiwi’.
New Zealand’s fourth-quarter consumer confidence reading could continue to impact NZD today. Later on, risk appetite could drive most movement.
Pound (GBP) firms on strong wage growth
The pound (GBP) strengthened yesterday after rising UK wage growth dampened bets on a Bank of England (BoE) interest rate cut.
UK earnings growth accelerated from 4.9% to 5.2% in the three months to October, exceeding forecasts of 5%. This could make BoE policymakers nervous about the persistence of inflation in the UK.
The spotlight for GBP investors today falls on the UK’s latest consumer price index, due out this evening. An expected jump in inflation could boost the pound by cementing bets that the BoE will leave interest rates unchanged at tomorrow’s meeting.
Euro (EUR) buoyed by upbeat German data
The euro (EUR) initially softened yesterday as the single currency suffered from its negative correlation with a strengthening US dollar (USD).
However, EUR was able to recover later in the session thanks to an unexpected improvement in Germany’s latest economic sentiment index.
Looking ahead, the Eurozone’s final inflation rate reading for November is due out today. But barring a deviation from the preliminary estimate, it may have little effect on the euro.
US dollar (USD) mixed despite strong sales growth
The US dollar was mixed yesterday, although it gained ground against some of its weaker rivals thanks to a risk-off market mood and stronger-than-forecast US retail sales growth.
A slight decline in US Treasury yields ahead of the Federal Reserve’s interest rate announcement seemed to pressure USD, limiting its upside potential.
The ‘greenback’ may remain somewhat muted today as markets brace for the Fed to announce its policy decision overnight.
Canadian dollar (CAD) falls alongside oil and inflation
The crude-linked Canadian dollar (CAD) fell yesterday as sliding oil prices and an unexpected softening of Canadian inflation both dragged the currency lower.
Amid a lack of Canadian data today, oil prices could once again impact the commodity-linked ‘loonie’. If crude extends its decline, CAD could weaken.
Data releases
08:00 NZD Westpac Consumer Confidence (Q4)
10:00 AUD Westpac Leading Index (Nov)
17:00 GBP Inflation Rate (Nov)
20:00 EUR Inflation Rate (Nov)