Australian dollar (AUD) falters amid economic concerns
The Australian dollar (AUD) weakened yesterday as the latest Ai group industry index declined more than forecast in September.
Adding to the pressure on the ‘Aussie’ was news that China had paused imports of iron ore from mining giant BHP.
Turning to today, Australia’s latest balance of trade is in focus for AUD investors. Could a narrowing trade surplus in August put fresh pressure on the ‘Aussie’?
New Zealand dollar (NZD) recovers amid risk-positive trade
The New Zealand dollar (NZD) initially stumbled in tandem with the Australian dollar yesterday, although the ‘kiwi’ managed to reclaim some ground thanks to a risk-on mood.
New Zealand economic data remains in short supply today, therefore market risk appetite could continue to drive NZD exchange rates.
Pound (GBP) buoyed by BoE bets
The pound (GBP) strengthened on Wednesday, with the UK currency seemingly drawing support from Bank of England (BoE) policy divergence.
With the BoE expected to hold interest rates higher for longer than many other major central banks, the pound proved attractive to investors.
With market-moving British data absent from the calendar during today’s session, Sterling could see uneven trade.
Euro (EUR) falls despite rising inflation
The euro (EUR) fell sharply against many of its peers yesterday, despite Eurozone inflation rising from 2% to 2.2% in September.
EUR’s losses came amid bubbling tensions between the EU and Russia, following drone sightings across Nordic countries in recent weeks, with Danish Prime Minister Mette Frederiksen warning that Europe is ‘in the most difficult and dangerous situation since the end of the second world war’.
Looking ahead, the Eurozone’s latest unemployment figures may lend EUR support today. Economists expect joblessness across the bloc to have remained at an all-time low in August.
US dollar (USD) slips amid political and economic headwinds
The US dollar (USD) stumbled yesterday as investors shunned the currency following the shutdown of the US government.
Attempts to recover proved short-lived as he latest ADP employment report revealed a shock drop in private sector jobs last month, putting renewed pressure on the American dollar.
US economic data is thin on the ground today, as the government shutdown delays some key releases. The ‘greenback’ may be left subdued, while any shifts in risk appetite could impact the safe-haven currency.
Canadian dollar (CAD) drops amid falling oil and manufacturing contraction
The crude-linked Canadian dollar (CAD) fell to multi-week lows yesterday, as weakening oil prices and a larger-than-forecast contraction in Canadian manufacturing activity both weighed on the ‘loonie’.
Today, oil price movements may be the defining factor for the Canadian dollar. Expect to see CAD soften if crude continues its recent decline.
Data releases
11:30 AUD Balance of Trade (Aug)
19:00 EUR Unemployment Rate (Aug)