Australian dollar (AUD) slips as consumer confidence weakens
The Australian dollar (AUD) saw some volatility yesterday but ultimately trended lower after Australia’s consumer confidence index for October fell from 95.4 to a five-month low of 92.1, rather than rising to 97.8 as expected.
In addition, the risk-sensitive ‘Aussie’ also struggled to attract support as market sentiment soured.
Australian economic data is in short supply today. As a result, market risk appetite may be the defining factor for AUD exchange rates.
New Zealand dollar (NZD) stumbles amid risk-off mood
The New Zealand dollar (NZD) also fell yesterday, with a risk-averse market mood sapping demand for the currency.
Today, the Reserve Bank of New Zealand (RBNZ) is expected to cut interest rates, which could see NZD slide. While a 25bps cut is likely, it’s also possible that the bank could lower rates by 50bps. A larger cut could lead to more significant losses for the ‘kiwi’.
Pound (GBP) slips amid fiscal fears
The pound (GBP) weakened yesterday as British government bond yields remained elevated, raising concerns about the UK’s fiscal position.
In addition, the increasingly risk-sensitive pound softened amid the risk-off market mood.
British data remains thin on the ground during today’s session, potentially leaving the pound to trade without a clear direction.
Euro (EUR) struggles as French political crisis continues
The euro (EUR) was subdued yesterday, weakening against its stronger rivals and wavering elsewhere, as the political uncertainty in France continued.
Following the shock resignation of French Prime Minister Sébastien Lecornu on Monday, the far-right National Rally party – the largest party in parliament – declined an invitation from Lecornu to participate in talks to solve the political crisis.
Germany’s latest industrial production figures could dent the euro today. Forecasters expect production in the Eurozone’s largest economy to have contracted 1% in August.
US dollar (USD) climbs in risk-averse trade
The US dollar (USD) strengthened yesterday as safe-haven demand boosted the currency’s appeal.
Investors opted for the safer ‘greenback’ amid concerns about a fresh 25% US tariff on imported trucks, as well as political uncertainty in Europe and Japan.
Turning to today, two Federal Reserve policymakers are due to speak. If they push back on talk of aggressive policy easing, USD could garner some support
Canadian dollar (CAD) rises despite downbeat trade figures
The Canadian dollar (CAD) strengthened yesterday, shrugging off weak trade figures, thanks to CAD’s positive correlation with USD and optimism over talks between Canadian Prime Minister Mark Carney and US President Donald Trump.
Amid an absence of Canadian data today, oil price movements may drive the commodity-linked ‘loonie’. If crude declines, the Canadian dollar could weaken in tandem.
Data releases
12:00 NZD RBNZ Interest Rate Decision
16:00 EUR German Industrial Production (Aug)
23:20 USD Fed Musalem Speech
23:30 USD Fed Barr Speech