Australian dollar (AUD) pressured by risk-off flows
The Australian dollar (AUD) was pressured at the end of last week amid a weakening of market risk sentiment.
This followed a continued recovery in the US dollar (USD), which sapped investor appetite for high-yield assets like the ‘Aussie’.
Turning to the start of this week, in the absence of any notable AUD data, movement in the Australian dollar is likely to remain tied to market risk dynamics.
New Zealand dollar (NZD) slides as trade data disappoints
The New Zealand dollar (NZD) also faltered on Friday, in response to data showing that New Zealand’s trade deficit climbed to a 10-month high in August, following a shock fall in exports.
Much like the antipodean cousin, the ‘kiwi’ is likely to be primarily influenced by market risk sentiment at the start of this week.
Pound (GBP) slides as UK borrowing spikes
The pound (GBP) closed last week’s session on a sour note as a surge in UK government borrowing overshadowed robust retail sales figures.
Public sector borrowing ballooned to almost £18bn in August, raising fresh concern over the pressures facing Chancellor Rachel Reeves as she prepares her autumn budget.
GBP investors will look to a speech by Bank of England (BoE) Chief Economist Huw Pill for impetus at the start of this week. As one of the BoE’s more hawkish policymakers, his comments could help propel Sterling higher.
Euro (EUR) slips on ECB inflation warning
The euro (EUR) faced headwinds on Friday, following comments from outgoing European Central Bank (ECB) Governing Council member Mario Centeno.
Centeno warned that the ECB won’t tolerate inflation falling below its 2% target for too long and that its next move is likely to be a rate cut.
Today sees the publication of the Eurozone’s latest consumer confidence figures, with the euro likely to be undermined if sentiment continued to deteriorate this month.
US dollar (USD) maintains post-Fed recovery
The US dollar (USD) strengthened at the end of last week, extending the recovery that followed the Federal Reserve’s interest rate decision on Wednesday.
This came as USD investors continued to reprice their rate cut bets, in the wake of the Fed’s warning on inflation risks and a larger-than-expected fall in US jobless claims.
A series of speeches by Fed policymakers may offer direction for the US dollar at the start of this week. A hawkish consensus could help the US dollar to maintain its positive momentum.
Canadian dollar (CAD) bolstered by rebound in retail sales
The Canadian dollar (CAD) ticked higher on Friday as CAD investors welcomed a surprisingly strong rebound in domestic retail sales last month.
Coming up, could an acceleration in Canadian producer price inflation propel the ‘loonie’ higher at the start of this week?
Data Releases
22:30 CAD PPI (Aug)
22:30 GBP BoE Pill Speech
00:00 EUR Consumer Confidence (Sep)