Australian dollar (AUD) softens amid risk-off mood
The Australian dollar (AUD) initially weakened yesterday as a souring mood in the wake of the Federal Reserve’s interest rate decision weighed on AUD.
The ‘Aussie’ managed to recoup some losses against its weaker peers in the evening, although it remained down against stronger rivals.
Turning to today, Australian economic data is still in short supply. Therefore risk appetite may drive AUD movement once again.
New Zealand dollar (NZD) plunges as recession strikes
The New Zealand dollar (NZD) dived to multi-year lows yesterday after a troubling 1% decline in third-quarter GDP showed that New Zealand suffered a recession.
This morning’s trade and consumer confidence figures could continue to impact NZD today. Later on, risk appetite may define the New Zealand dollar’s direction.
Pound (GBP) drops following BoE decision
The pound (GBP) slid during yesterday’s European session following the Bank of England’s (BoE) final interest rate decision of 2024.
Although the bank left its policy unchanged, as expected, three policymakers voted to cut rates. In addition, the bank warned of stagflation risks and lowered its growth forecast.
Sterling may attempt to claw back some losses this evening, if UK retail sales recovered in November. However, its upside potential may be limited.
Euro (EUR) pressured by USD strength
The euro (EUR) faced selling pressure against many of its counterparts yesterday due to the currency’s strong negative correlation with the US dollar (USD).
A better-than-forecast improvement in Germany’s consumer confidence index failed to lift EUR, as consumers in the Eurozone’s largest economy remain deeply pessimistic.
More German data is due out today. Could another decline in the producer price index see the euro soften?
US dollar (USD) surges following Fed decision
The US dollar leapt to multi-year highs yesterday after the Federal Reserve delivered a widely expected rate cut but indicated a slower pace of policy loosening in 2025.
After trimming its gains due to profit-taking as the day progressed, the ‘greenback’ then enjoyed renewed support overnight as US third-quarter GDP was revised higher.
USD exchange rates could build on yesterday’s gains tonight, as the latest core PCE price index is forecast to show an uptick in inflation.
Canadian dollar (CAD) rises as wage growth accelerates
The Canadian dollar (CAD) firmed yesterday thanks to its positive correlation with USD and an unexpected acceleration in Canadian wage growth.
Tonight, Canadian retail sales are the focus. Could a rise in sales growth boost CAD?
Data releases
07:00 NZD ANZ Roy Morgan Consumer Confidence (Dec)
07:45 NZD Balance of Trade (Nov)
17:00 EUR German PPI (Nov)
17:00 GBP Retail Sales (Nov)
23:30 CAD Retail Sales (Oct)
23:30 USD Core PCE Price Index (Nov)