Australian dollar (AUD) drops following RBA minutes
The Australian dollar (AUD) fell yesterday after the Reserve Bank of Australia’s (RBA) latest meeting minutes revealed that policymakers believe interest rates are restrictive, hinting at potential cuts in the future.
In addition, US-China trade tensions unsettled AUD investors, with Washington and Beijing rolling out new container port fees.
Turning to today, a speech from RBA Assistant Governor Sarah Hunter could influence AUD. If she strikes a slightly more hawkish tone than the meeting minutes, the ‘Aussie’ may recover some ground.
New Zealand dollar (NZD) slips amid souring mood
The New Zealand dollar (NZD) also weakened during yesterday’s session as a risk-off mood and Reserve Bank of New Zealand (RBNZ) rate cut bets both weighed on NZD.
New Zealand data is absent from the calendar today, therefore, market risk dynamics could continue to be the primary influence on the ‘kiwi’.
Pound (GBP) plunges as UK jobs market cools
The pound (GBP) slumped on Tuesday as signs of a slowing UK jobs market revived bets on another Bank of England (BoE) interest rate cut in 2025.
The latest labour market overview showed that British unemployment rose to a four-year high in the three months to August, while regular wage growth eased.
Today, BoE Deputy Governors Dave Ramsden and Sarah Breeden are due to speak. If either policymaker expresses concern over yesterday’s jobs data, Sterling could stumble.
Euro (EUR) firms as German economic sentiment improves
The euro (EUR) rose against its weaker rivals yesterday, thanks to a risk-off mood and an improvement in German economic sentiment in August.
The latest ZEW survey score showed a rise from 37.3 to 39.3. Although this was lower than the expected score of 40.5, it still provided EUR with support.
Looking forward, the common currency could face headwinds later today as new data is expected to show that Eurozone industrial production slumped 1.5% in August.
US dollar (USD) firms in gloomy trade
The US dollar (USD) rose yesterday as a risk-off market mood provided the currency with safe-haven flows.
The gloomy tone came amid the rising US-China trade tensions and a warning from the International Monetary Fund (IMF) that the outlook for global growth remains ‘dim’.
US economic releases are in short supply today. Therefore, market risk appetite and US-China trade news could drive USD exchange rates. If the mood remains risk averse, the ‘greenback’ could gain ground.
Canadian dollar (CAD) mixed on USD and oil correlations
The crude-linked Canadian dollar (CAD) firmed against weaker rivals yesterday thanks to its positive correlation with USD, but fell against stronger peers amid a decline in oil prices.
Market-moving Canadian data is thin on the ground today, potentially leaving the ‘loonie’ to trade on crude price movements once again.
Data releases
09:30 AUD RBA Hunter Speech
17:40 EUR ECB Guindos Speech
18:00 GBP BoE Ramsden Speech
19:00 EUR Industrial Production (Aug)
01:00 GBP BoE Breeden Speech