Australian dollar (AUD) rises following RBA remarks
The Australian dollar (AUD) strengthened yesterday following some hawkish comments from Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser.
In an interview with Reuters, Hauser said there was a debate over whether the current cash rate is restrictive enough to keep inflation under control, hinting at the possibility of future interest rate hikes.
Australia’s latest jobs data is in the spotlight for AUD investors today. If unemployment fell in October, as forecast, the ‘Aussie’ could gain ground.
New Zealand dollar (NZD) firms as risk appetite recovers
The New Zealand dollar (NZD) initially wobbled yesterday amid an uncertain market mood. However, risk sentiment picked up in the evening, thereby boosting the risk-sensitive currency.
A recovery in New Zealand card spending, indicating increased consumer activity, could support NZD today. Otherwise, the ‘kiwi’ may track changes in risk appetite.
Pound (GBP) dragged down by political jitters
The pound (GBP) came under fresh pressure yesterday amid speculation that Prime Minister Keir Starmer could face a leadership challenge following the autumn budget.
The rumours had echoes of the political instability that plagued the pound during the final years of the previous government, thereby unnerving GBP investors.
The UK’s preliminary GDP figures for the third quarter are in focus today. Slowing growth could weigh heavily on the pound, as it could fuel bets on another Bank of England (BoE) interest rate cut in December.
Euro (EUR) quiet amid risk-positive trade
The euro (EUR) was subdued yesterday as a modest recovery in the US dollar (USD) and a risk-on market mood weighed on EUR exchange rates.
A lack of impactful Eurozone economic data meant the euro was left to trade on these wider market trends.
The European Central Bank’s (ECB) latest economic bulletin could underpin EUR today, if it points to a steady economy and indicates that inflation is under control.
US dollar (USD) crawls up as House votes on shutdown
The US dollar ticked higher yesterday, posting a modest recovery following Tuesday’s retreat, as markets anticipated an end to the longest government shutdown in US history.
Having cleared the Senate, the funding bill went to the Republican-controlled House of Representatives, where it was also expected to pass.
USD could face volatility today after the House did vote to end the US government shutdown. While the news could support the US dollar, a broader risk-on mood may sap safe-haven demand.
Canadian dollar (CAD) uncertain amid oil and USD correlations
The Canadian dollar (CAD) had another mixed session yesterday as the currency’s positive correlations with a rising US dollar and retreating oil prices pulled it in different directions.
Canadian data continues to be thin on the ground today, likely leaving the ‘loonie’ to trade on oil price dynamics and USD movement once again.
Data releases
07:45 NZD Electronic Retail Card Spending (Oct)
10:30 AUD Unemployment Rate (Oct)
17:00 GBP GDP Growth Rate (Q3)
19:00 EUR ECB Economic Bulletin
20:00 EUR Industrial Production (Sep)