Australian dollar (AUD) slides in risk-off trade
The Australian dollar (AUD) retreated at the end of last week as the currency fell afoul of a souring market mood.
The downturn in the ‘Aussie’ also appeared linked to data pointing to a slowdown in the Chinese economy last month.
AUD data is in short supply at the start of this week, likely leaving movement in the Australian dollar to remain linked to market risk dynamics.
New Zealand dollar (NZD) bolstered by positive PMI data
The New Zealand dollar (NZD) trended higher on Friday, lifted by a stronger-than-expected domestic manufacturing PMI.
The ‘kiwi’ will look to build on those gains at the start of this week after this positive momentum was also reflected in New Zealand’s services sector last month.
Pound (GBP) pressured by budget uncertainty
The pound (GBP) stumbled over the finishing line last week, following reports that Chancellor Rachel Reeves is ditching plans to raise income tax in her autumn budget.
The news spooked investors as it appeared to dent the Chancellor’s fiscal credibility, before separate reports emerged suggesting the government is facing a smaller fiscal blackhole than previously feared, allowing Sterling to claw back a portion of its losses.
In the absence of any notable GBP economic releases, UK budget speculation may continue to infuse volatility into the pound at the start of this week.
Euro (EUR) buoyed by cautious mood
The euro (EUR) ticked higher on Friday, as demand for safe-haven assets boosted the single currency.
EUR exchange rates were also supported by the Eurozone’s latest GDP figures, which confirmed growth in the bloc accelerated to 0.2% in the third quarter.
Eurozone data is thin on the ground today, which may leave the euro without any directional bias.
US dollar (USD) finds fleeting gains on fading Fed rate cut bets
The US dollar firmed at the end of last week amid a trimming of Federal Reserve interest rate cut bets, with the odds of a December cut falling below 50%.
However, these gains were trimmed by the end of Friday’s session, with USD investors growing cautious as they braced for an expected rush of US economic releases delayed by the US government shutdown.
Speculation that this data could prove underwhelming and trigger a dovish repricing of Fed rate expectations may keep a lid on the US dollar at the start of this week.
Canadian dollar (CAD) bolstered by rising oil prices
The Canadian dollar (CAD) closed last week’s session on positive footing, bolstered by a rise in oil prices following Ukrainian drone strikes on a Russian depot.
Coming up, Canada’s latest CPI figures may help to extend the upside in CAD at the start of this week if inflation remained elevated in October.
Data releases
07:30 NZD Services (PSI)
23:30 CAD Inflation Rate (Oct)