Australian dollar (AUD) dented by underwhelming data
The Australian dollar (AUD) came under pressure on Wednesday as Westpac’s latest leading index fell short of market expectations in November.
The ‘Aussie’ was then able to claw back some of these losses later in the day, amid a positive shift in risk appetite through the European trading session.
Looking ahead, with notable domestic data in short supply, movement in the Australian dollar may be tied to market risk dynamics today.
New Zealand dollar (NZD) wavers amid mixed market mood
The New Zealand dollar (NZD) fluctuated yesterday amid an uneven market mood and stronger-than-expected domestic consumer confidence figures.
Turning to today’s session, the ‘kiwi’ weakened after New Zealand’s latest GDP figures revealed the country slipped into a recession over the summer.
Pound (GBP) subdued despite rising UK inflation
The pound (GBP) traded sideways on Wednesday, with GBP investors seemingly unfazed by a sharp rise in UK inflation.
While the inflation surge erased lingering expectations of an imminent Bank of England (BoE) rate cut, concerns grew over how stubborn price pressures could weigh on the UK’s economic outlook.
Attention now turns to the BoE’s final policy meeting of the year. With rates expected to remain unchanged, Sterling’s movement today will likely hinge on the bank’s forward guidance.
Euro (EUR) flat as Eurozone inflation revised lower
The euro (EUR) also traded in a narrow range yesterday, with the single currency finding limited support following the release of the Eurozone’s own consumer price index.
November’s finalised CPI figures saw inflation in the bloc revised down from 2.3% to 2.2%. The euro was subsequently left rangebound as it stoked expectations the European Central Bank (ECB) will continue to cut interest rates in the coming months.
US dollar (USD) strengthens following hawkish Fed rate decision
The US dollar (USD) rallied in overnight trade, following the Federal Reserve’s latest interest rate decision.
With the bank’s 25 basis-point rate cut widely priced in, the Fed’s hawkish forward guidance helped to bolster demand for the ‘greenback’.
Coming up, in addition to the fallout from the Fed’s rate decision, USD exchange rates may also be influenced by the release of the finalised third-quarter US GDP figures.
Canadian dollar (CAD) buoyed by rising oil prices
The Canadian dollar (CAD) firmed on Wednesday, with the commodity-sensitive currency rising in tandem with oil prices.
In the absence of any Canadian data of note, it’s likely the ‘loonie’ will continue to take its cues from oil price movements today. If prices continue to rise, CAD may continue to climb.
Data releases
07:45 NZD GDP (Q3)
22:00 GBP BoE Interest Rate Decision
23:30 USD GDP (Q3)