Australian dollar (AUD) firms amid strengthening commodity prices
The Australian dollar (AUD) accelerated against the majority of its peers on Thursday as the currency was underpinned by an uptick in commodity prices.
This commodities rally came amid speculation that US sanctions on Russian oil could be extended to other raw materials and naturally reflected positively on Australia’s export-heavy economy.
Australia’s latest PMI data will drive movement in the ‘Aussie’ today. If private sector growth slows as forecast, AUD exchange rates are likely to weaken.
New Zealand dollar (NZD) dented by strikes
The New Zealand dollar (NZD) faced headwinds yesterday as NZD investors were unnerved by a ‘mega strike’ of public sector workers.
In the absence of any notable domestic data, its likely movement in the ‘kiwi’ will be linked to market risk sentiment.
Pound (GBP) extends post-inflation losses
The pound (GBP) remained on the defensive yesterday as Wednesday’s underwhelming consumer price index continued to drag on Sterling sentiment.
With inflation appearing to have peaked below the Bank of England’s (BoE) expectations, there is growing speculation the BoE will cut rates by the end of the year.
UK PMI and retail sales data could trigger further weakness in the pound at the end of this week, with any signs of a slowing economy likely to place even more pressure on the BoE to ease policy.
Euro (EUR) stabilises amid improvement in consumer sentiment
The euro (EUR) initially faltered yesterday, before rebounding with the release of the Eurozone’s latest consumer confidence index.
October’s preliminary figures showed a surprise improvement in sentiment, with the index rising to its highest levels since February.
Today also sees the release of the Eurozone’s own PMI data, which may leave the euro subdued if it reports a moderation in private-sector growth this month.
US dollar (USD) rangebound ahead of inflation release
The US dollar (USD) traded sideways on Thursday as USD investors were reluctant to make any aggressive bets ahead of Friday’s highly anticipated US CPI print.
As the only federal data release permitted during the government shutdown, more weight may be given to September’s US inflation report than usual.
If inflation accelerates as forecast, it could help to temper Federal Reserve rate cut bets and lift the US dollar, but a softer-than-expected reading may place significant pressure on USD.
Canadian dollar (CAD) muted as retail sales slump
The Canadian dollar (CAD) struggled to attract support on Thursday as data showing a slump in domestic retail sales last month offset a sharp appreciation of oil prices.
CAD data is thin on the ground today, likely leaving movement in the ‘loonie’ to be influenced by oil price dynamics, with the Canadian dollar likely to catch bids if prices continue to appreciate.
Data Releases
08:00 AUD Composite PMI (Oct)
16:00 GBP Retail Sales (Sep)
18:00 EUR Composite PMI (Oct)
18:30 GBP Composite PMI (Oct)
22:30 USD Inflation Rate (Sep)