Australian dollar (AUD) slides despite strong trade figures
The Australian dollar (AUD) fell sharply yesterday as risk aversion swept markets, sapping demand for the ‘Aussie’.
The downside came despite upbeat trade figures, with Australia’s trade surplus unexpectedly widening in July.
With Australian data in short supply today, AUD exchange rates may track any shifts in the market mood. If a gloomy mood prevails, the ‘Aussie’ could face further losses.
New Zealand dollar (NZD) plunges as sentiment sours
The New Zealand dollar (NZD) also slumped yesterday as the downbeat market mood weighed on the risk-sensitive currency.
New Zealand economic data is also absent from the calendar today, likely leaving the ‘kiwi’ to trade on market risk dynamics once again.
Pound (GBP) supported as calm returns to bond markets
The pound (GBP) continued to stabilise yesterday as UK bond yields retreated further from the 27-year highs hit earlier in the week.
GBP investors welcomed the calm returning to bond markets, with the pound gaining ground against weaker peers and holding steady elsewhere.
Turning to today, the UK’s latest retail sales figure is the focus for GBP investors. A sharp slowdown in sales growth in July could subdue Sterling.
Euro (EUR) muted as retail sales contract
The euro (EUR) softened yesterday after the Eurozone’s latest retail sales report showed a larger-than-forecast contraction in July.
However, the safer currency was able to rise against riskier peers thanks to a thoroughly downbeat market mood.
A forecast recovery in German factory orders in July could lend the single currency support today, although only a modest rebound is expected, so gains may be limited.
US dollar (USD) firms amid gloomy mood and upbeat PMI
The US dollar (USD) marched higher yesterday as a risk-off market mood buoyed the safe-haven currency.
Fresh evidence that the US labour market was slowing saw USD waver in the evening, before a stronger-than-expected ISM services PMI provided the ‘greenback’ with renewed support.
Today, the spotlight falls on the latest US non-farm payrolls report. Another weak reading from this high-impact piece of American jobs data could sink the US dollar by fuelling bets on a more aggressive pace of interest rate cuts from the Federal Reserve.
Canadian dollar (CAD) undermined by falling oil prices
The crude-linked Canadian dollar (CAD) softened against its stronger rivals yesterday amid a decline in oil prices.
Canada’s latest jobs data could drag CAD lower today, with economists expecting unemployment to have risen to 7% in August, matching the near four-year high hit in May.
Data releases
16:00 EUR German Factory Orders (Jul)
16:00 GBP Retail Sales (Jul)
19:00 EUR GDP Growth Rate (Q2)
22:30 CAD Unemployment Rate (Aug)
22:30 USD Non Farm Payrolls (Aug)
00:00 CAD Ivey PMI (Aug)