Australian dollar (AUD) finds fleeting gains on upbeat trade data
The Australian dollar (AUD) was initially supported on Thursday as Australia reported a larger-than-expected trade surplus in September, driven by an impressive rebound in exports.
However, AUD exchange rates then plunged overnight, amid a negative shift in risk appetite.
Coming up, the focus for AUD investors today will be on China’s latest trade figures. Expect the ‘Aussie’ to be dented if import growth cooled as forecast last month.
New Zealand dollar (NZD) slides in downbeat trade
The New Zealand dollar (NZD) trended broadly lower yesterday as the cautious market mood left investors wary of the risk-sensitive currency.
NZD data is in short supply today, potentially placing the ‘kiwi’ at risk of further losses if sentiment continues to sour.
Pound (GBP) stable as BoE leaves rates on hold
The pound (GBP) held its ground on Thursday, after the Bank of England (BoE) left interest rates on hold following its latest policy meeting.
While widely anticipated, the decision was far from unanimous. The Monetary Policy Committee was split 5-4 in favour of keeping rates on hold, stoking bets the bank will deliver one more cut before the end of the year.
With no major UK economic releases on the docket for today, Sterling is likely to take its cues from market sentiment and ongoing speculation surrounding Chancellor Rachel Reeves’s autumn budget, which continues to cast a shadow over GBP performance.
Euro (EUR) gains capped by underwhelming data
The euro (EUR) ticked higher on Thursday, underpinned by its negative correlation with the US dollar (USD).
However, the single currency’s upside potential remained limited, amid the release of weaker-than-expected German industrial production and Eurozone retail sales figures.
Germany’s latest trade figures may offer direction to the euro later today. Although the country’s trade surplus is expected to have narrowed slightly in September, a recovery in exports could help lift the euro as we head into the weekend.
US dollar (USD) rally runs out of steam
The US dollar softened yesterday as part of a wider market correction that has filtered through equity markets in recent days.
This comes amid concerns that the recent hawkish repricing of Federal Reserve interest rate expectations may have been a little overdone, as well as mounting concerns over the US government shutdown.
In the absence of any notable US data, movement in the US dollar is likely to remain linked to wider market trends.
Canadian dollar (CAD) muted as oil prices soften
The Canadian dollar (CAD) was subdued on Thursday as a dip in oil prices weakened the appeal of the commodity-linked currency.
Canada’s latest jobs report will be in the spotlight for CAD investors at the end of this week, with CAD exchange rates poised to slide if the labour market continued to cool in October.
Data releases
17:00 EUR German Trade Balance (Sep)
23:30 CAD Unemployment Rate (Oct)