Australian dollar (AUD) surges on impressive Chinese trade data
The Australian dollar (AUD) got off to a flying start this week, with AUD investors welcoming the release of China’s stronger-than-expected trade figures.
AUD investors were particularly cheered by the jump in imports, which reached a seven-month high in September and should translate into strong demand for Australian exports.
The minutes from the Reserve Bank of Australia’s (RBA) September policy meeting are scheduled for release this morning. A hawkish consensus from RBA members could help the ‘Aussie’ to maintain its positive trajectory.
New Zealand dollar (NZD) struggles in cautious trade
The New Zealand dollar (NZD) was subdued on Monday as fresh tariff uncertainty limited market risk appetite.
Today’s session kicked off with New Zealand’s latest retail card spending data, with the ‘kiwi’ already facing resistance after September’s figures pointed to a slowdown in consumer spending.
Pound (GBP) pressured by budget warning
The pound (GBP) stumbled yesterday amid fresh concerns over Chancellor Rachel Reeves’s autumn budget.
This followed a warning from the Institute for Fiscal Studies that the Chancellor risks ‘unnecessary economic damage’ if she focuses too much on the political optics of her budget.
The UK’s latest jobs report will be in the spotlight for GBP investors today. If August’s data points to a further cooling of the labour market, Sterling is likely to weaken today.
Euro (EUR) pressured by scepticism about new French government
The euro (EUR) faced an uphill battle on Monday as French President Emmanuel Macron’s decision to reappoint Sébastien Lecornu as Prime Minister didn’t inspire a great deal of confidence from EUR investors.
While the move allowed Macron to sidestep immediate legislative elections, investors remain sceptical that Lecornu’s second chance will bring any lasting stability.
Germany’s latest ZEW survey may offer the euro some respite from French politics today. If economic sentiment continued to improve this month, it might allow the single currency to claw back some of its recent losses.
US dollar (USD) rocked by US-China trade uncertainty
US markets were closed for Columbus Day on Monday, but volatility in the US dollar (USD) remained pronounced amid US-China tariff jitters.
In a social media post on Sunday, US President Donald Trump appeared to walk back his threats for ‘massive’ tariffs on China, casting further uncertainty over the trade relations between the world’s two largest economies.
A speech from Federal Reserve Chair Jerome Powell will accompany the reopening of US markets later today. A hawkish tilt to Powell’s remarks could temper Fed rate cut bets and lift the US dollar.
Canadian dollar (CAD) buoyed by rising oil prices
The Canadian dollar (CAD) strengthened on Monday, with the commodity-linked currency being underpinned by a rebound in oil prices.
Oil price dynamics will likely continue to drive movement in CAD exchange rates today. If crude continues to appreciate, it will likely pull the ‘loonie’ higher with it.
Data releases
07:45 NZD Electronic Retail Card Spending (Sep)
10:30 AUD RBA Meeting Minutes
16:00 GBP Unemployment Rate (Aug)
16:00 GBP Average Earnings (Aug)
19:00 EUR German ZEW Economic Sentiment Index (Oct)
02:20 USD Fed Chair Powell Speech