Australian dollar (AUD) slides as investors rattled by jobs data
The Australian dollar (AUD) weakened through yesterday’s session, pressured by a combination of market risk aversion and a disappointing jobs report that exposed cracks in Australia’s labour market.
The latter was particularly impactful as a startling drop in full-time positions resulted in the first labour contraction since February.
In the absence of any notable domestic data, movement in the ‘Aussie’ is likely to be tied to market risk dynamics today, potentially leaving AUD to weaken if a risk-off mood prevails.
New Zealand dollar (NZD) slumps on abysmal GDP data
The New Zealand dollar (NZD) faced significant selling pressure on Thursday as a much weaker-than-expected second-quarter GDP print stoked bets for a more aggressive interest rate cut from the Reserve Bank of New Zealand (RBNZ).
Coming up, the release of New Zealand’s latest trade figures could reinforce the NZD selloff this morning, if they report the country’s trade deficit continued to swell in August.
Pound (GBP) steady following BoE rate decision
The pound (GBP) was mostly rangebound yesterday, following the Bank of England’s (BoE) widely expected decision to leave interest rates on hold this month.
While the BoE’s forward guidance suggests the door remains open to further cuts, a more hawkish voting split sustained bets the bank will leave its monetary policy untouched through the remainder of the year.
Coming up, the UK’s latest retail sales figures are expected to report consumer spending moderated last month, potentially placing pressure on the pound.
Euro (EUR) flat on ECB de Guindos comments
The euro (EUR) was stable on Thursday as EUR investors digested the latest comments from European Central Bank Vice-President Luis de Guindos.
Speaking in London, de Guindos suggested the bank should follow a ‘very prudent’ approach to monetary policy amid the current high levels of uncertainty.
Turning to today’s session, with EUR data in short supply, the euro may trade without strong directional bias.
US dollar (USD) fluctuates post Fed rate cut
Trade in the US dollar (USD) was mixed yesterday. The ‘greenback’ initially surrendered the bulk of the gains it notched in the immediate aftermath of the Federal Reserve’s latest policy decision, as investors remained convinced the Fed will deliver two more cuts before the end of 2025.
USD demand then rebounded in response to a larger-than-expected fall in US initial jobless claims last week.
US data is thin on the ground at the end of this week, but we could continue to see the US dollar influenced by Fed rate speculation.
Canadian dollar (CAD) buoyed by USD strength
The Canadian dollar (CAD) trended broadly higher on Thursday, thanks to its positive correlation with the US dollar.
Canada will publish its latest retail sales figures later today, with the ‘loonie’ potentially ending the week on a sour note if sales growth continued to contract in August.
Data releases
08:45 NZD Balance of Trade (Aug)
16:00 GBP Retail Sales (Aug)
22:30 CAD Retail Sales (Aug)