Australian dollar (AUD) buoyed by RBA minutes
The Australian dollar (AUD) edged higher on Tuesday, as the minutes from the Reserve Bank of Australia’s (RBA) latest policy meeting were enough to offset a broadly risk-off market mood.
The minutes struck a broadly hawkish tone, leading some analysts to speculate that its next move could be an interest rate hike rather than a cut.
Coming up, Australia’s latest wage price index could bolster hawkish RBA rate bets if an uptick in earnings stokes inflation expectations.
New Zealand dollar (NZD) wavers in mixed trade
The New Zealand dollar (NZD) traded in a wide range yesterday, with its initial losses being reversed throughout the European trading session.
New Zealand’s third-quarter PPI figures could offer support for the ‘kiwi’ today, with a rise in input prices in the third quarter likely to boost inflation expectations and potentially temper Reserve Bank of New Zealand (RBNZ) rate cut bets.
Pound (GBP) undermined by budget uncertainty
The pound (GBP) struggled to gain traction on Tuesday as investors remained cautious ahead of next week’s critical autumn budget.
GBP investors are growing increasingly concerned that Chancellor Rachel Reeves’s budget will be received poorly by markets, with a further complication of the UK’s tax system potentially placing additional strain on growth.
The UK’s consumer price index will be centre stage today. Expect the pound to falter if inflation cools as expected and bolsters Bank of England (BoE) rate cut bets.
Euro (EUR) left adrift amid lull in data
The euro (EUR) lacked direction on Tuesday as a quiet Eurozone calendar left the single currency without a clear catalyst.
The single currency eventually found some support as the US dollar (USD) weakened, although the resulting gains were extremely modest.
The Eurozone will publish its own CPI figures today. While the impact may be minimal if October’s finalised inflation figures match initial estimates, any unexpected revisions could spark volatility in the euro.
US dollar (USD) dented by worrying jobs data
The US dollar initially strengthened yesterday, as fears of a market correction in AI-linked stocks bolstered safe-haven demand.
However, the ‘greenback’ then relinquished these gains on the back of underwhelming US jobs data, which revived concerns about the resilience of the labour market.
Coming up, the Federal Reserve will publish the minutes from its latest policy meeting during Wednesday’s US trading session. If policymakers strike a hawkish tone, it’s likely to lift USD sentiment.
Canadian dollar (CAD) firms as Carney passes his first budget
The Canadian dollar (CAD) trended broadly higher on Tuesday, as CAD investors expressed relief that Prime Minister Mark Carney passed his first federal budget.
Oil price dynamics may drive movement in the ‘loonie’ today, with CAD exchange rates potentially weakening if crude prices continue to drop.
Data Releases
07:45 NZD PPI Input (Q3)
10:30 AUD Wage Price Index (Q3)
17:00 GBP Inflation Rate (Oct)
20:00 EUR Inflation Rate (Oct)
05:00 USD FOMC Minutes