Australian dollar (AUD) supported by China stimulus hopes
The Australian dollar (AUD) initially firmed yesterday as rising commodity prices and hopes for more stimulus measures from China supported the currency.
However, a risk-off mood capped AUD’s upside and saw it trim its gains against stronger rivals in the evening.
The Reserve Bank of Australia (RBA) will publish its latest Bulletin this morning. If the report raises concerns about the health of Australia’s economy, increased bets on more RBA interest rate cuts could hurt the ‘Aussie’.
New Zealand dollar (NZD) moves in line with AUD
The New Zealand dollar (NZD) traded in tandem with its Australian counterpart yesterday, with NZD initially rising before retreating against some rivals later in the session.
With New Zealand economic data absent from today’s economic calendar, market risk appetite could drive NZD exchange rates. A gloomy mood may sap demand for the ‘kiwi’.
Pound (GBP) slumps as UK inflation misses forecasts
The pound (GBP) fell sharply at the start of yesterday’s European session, striking weekly lows against some peers, as softer-than-forecast UK inflation increased the odds of a Bank of England (BoE) interest rate cut in December.
Headline inflation held at 3.8% for the third consecutive month in September, rather than rising to 4% as forecast, suggesting inflation has peaked and opening the door to another rate cut before the end of the year.
New data from the Confederation of British Industry (CBI) could influence the pound today. The business optimism index is set to have declined in the fourth quarter, while industrial orders are also set to fall in October. This could dent GBP if the data meets expectations.
Euro (EUR) struggles as USD rises
The euro (EUR) was subdued yesterday as the common currency lacked support in the absence of impactful Eurozone data.
This left EUR exposed to its negative correlation with the US dollar (USD), with the euro weakening as the American ‘greenback’ gained ground.
Today, EUR investors may be focused on the Eurozone’s latest consumer confidence index. With household morale forecast to have deteriorated in October, the euro could struggle.
US dollar (USD) ticks higher amid souring mood
The US dollar gained ground yesterday, with the safe-haven currency benefitting from a broadly risk-off market mood.
Recent concerns about the health of the global economy and speculation of an AI bubble weighed on investor sentiment.
American economic data remains thin on the ground today, leaving the US dollar to trade on wider market trends such as risk appetite and US-China trade developments.
Canadian dollar (CAD) firms as crude prices climb
The crude-linked Canadian dollar (CAD) wavered higher yesterday as rising oil prices lifted the currency.
Canada’s latest retail sales figures are the focus for CAD investors today. Sales growth is expected to have slowed from 1% to 0.5%, which could put some pressure on the ‘loonie’.
Data releases
10:30 AUD RBA Bulletin
20:00 GBP CBI Business Optimism Index (Q4)
20:00 GBP CBI Industrial Trends Orders (Oct)
22:30 CAD Retail Sales (Sep)
00:00 EUR Consumer Confidence (Oct)