Australian dollar (AUD) retreats amid lack of data
After initially touching multi-day highs yesterday, the Australian dollar (AUD) then trended lower as a lack of Australian economic data exposed AUD to some profit-taking.
The ‘Aussie’ was able to recoup some of these losses in the evening amid a risk-on mood, although it drifted lower overall.
Domestic data continues to be in short supply today, likely leaving the Australian dollar to trade on market risk appetite.
New Zealand dollar (NZD) stumbles as trade deficit widens
The New Zealand dollar (NZD) slipped yesterday as new data showed that New Zealand’s trade deficit widened in September, although a cheery tone among investors limited NZD’s downside.
Risk sentiment could also be the defining factor for the ‘kiwi’ today. If markets remain upbeat, NZD could climb.
Pound (GBP) unclear following mixed borrowing data
The pound (GBP) traded without a clear direction yesterday, with Sterling rising against weaker peers, amid mixed data on UK government finances.
Although borrowing swelled in September, the Office for Budget Responsibility (OBR) said that improved tax receipts have eased pressures, with borrowing expected to decline though the second half of the year.
Turning to today, the focus falls on the UK’s latest consumer price index. With headline inflation forecast to have risen to 4% in September – twice as high as the Bank of England’s (BoE) 2% target – a pullback in BoE interest rate cut bets could support the pound.
Euro (EUR) undermined by USD correlation
The euro (EUR) fell against its stronger peers yesterday as the common currency was pressured by its negative correlation with the US dollar (USD).
Meanwhile, a lack of Eurozone data somewhat muted the euro’s movement.
European Central Bank (ECB) President Christine Lagarde and Vice-President Luis de Guindos are due to deliver speeches today. A hawkish consensus could support EUR exchange rates.
US dollar (USD) firms as economic fears ease
The US dollar marched higher yesterday as recent concerns about the US credit market eased.
In addition, US-China trade tensions continued to cool, with US President Donald Trump saying he was sure the two sides will reach a ‘fantastic deal’.
Global risk dynamics could drive the ‘greenback’ today, as US data is absent from the economic calendar. Could a cheery mood undermine USD?
Canadian dollar (CAD) rises as inflation beats forecasts
The Canadian dollar (CAD) rose yesterday, with the ‘loonie’ initially supported by a rise in oil prices and then by hotter-than-forecast Canadian inflation in the evening.
Today, the commodity-linked Canadian dollar could be primarily influenced by oil prices. If crude continues to climb, CAD could also gain ground.
Data releases
16:00 GBP Inflation Rate (Sep)
21:00 EUR ECB Guindos Speech
22:25 EUR ECB President Lagarde Speech