Australian dollar (AUD) rangebound amid unsure mood
The Australian dollar (AUD) wavered mostly sideways on Monday as a rather muted start to the week and shifting market mood saw AUD lack direction.
While a risk-on mood initially lent the ‘Aussie’ modest support, strength in the safe-haven US dollar (USD) offset AUD’s upside.
Today, all eyes are on the Reserve Bank of Australia’s (RBA) latest policy decision. The bank is expected to hold interest rates steady, while a hawkish outlook could support the Australian dollar.
New Zealand dollar (NZD) softens in absence of data
The New Zealand dollar (NZD) trended lower yesterday, with a lack of data exposing NZD to losses amid ongoing concerns about the New Zealand economy.
New Zealand data is absent from the calendar today, likely leaving NZD to trade on its positive correlation with AUD and market risk sentiment.
Pound (GBP) uncertain due to lack of data
The pound (GBP) lacked a clear direction yesterday as an absence of UK data left the currency rudderless.
Domestic news also failed to provide fresh impetus. While anxiety ahead of the autumn budget weighed on GBP, bets that the Bank of England (BoE) will leave rates unchanged at this week’s meeting helped offset the downside.
British data continues to be in short supply today, potentially leaving the pound muted as GBP investors look ahead to the BoE’s coming rate decision.
Euro (EUR) flat as PMI meets forecasts
The euro (EUR) also moved without a clear directional bias yesterday as a muted tone prevailed in the currency market.
The Eurozone’s final manufacturing PMI failed to move the dial on EUR, with results printing in line with preliminary estimates to show that factory activity stalled in October.
Turning to today, a speech from European Central Bank (ECB) President Christine Lagarde could impact EUR exchange rates. If the ECB chief maintains her hawkish tone, the single currency could strengthen.
US dollar (USD) enjoys Fed decision afterglow
The US dollar ticked higher yesterday as last week’s Federal Reserve decision continued to provide modest tailwinds, with markets adjusting their expectations for another rate reduction in 2025.
However, a weaker-than-expected ISM manufacturing PMI placed some pressure on the ‘greenback’ in the evening. US factory activity contracted more than forecast in October.
Federal Reserve policymaker Michelle Bowman is due to deliver a speech later today. As she is one of the more dovish officials at the Fed, her comments could weigh on USD.
Canadian dollar (CAD) declines in tandem with oil
The crude-linked Canadian dollar (CAD) softened yesterday as falling oil prices dragged on the currency.
Oil price dynamics could drive the ‘loonie’ again today. If crude continues to weaken, CAD may face further losses.
Data releases
13:30 AUD RBA Interest Rate Decision
17:40 EUR ECB President Lagarde Speech
21:35 USD Fed Bowman Speech