Australian dollar (AUD) slides in risk-off trade
The Australian dollar (AUD) trended broadly lower yesterday amid a deterioration in market risk sentiment.
The downbeat mood was linked to jitters ahead of Nvidia’s third-quarter earnings report as the company’s performance was seen as a bellwether for the wider tech sector amid fears of a market correction in AI-linked stocks.
AUD investors will look to speeches by Reserve Bank of Australia (RBA) policymakers Ellis Connolly and Sarah Hunter for fresh impetus today. If they echo the hawkish sentiment of their colleague Andrew Hauser, then the ‘Aussie’ is likely to strengthen.
New Zealand dollar (NZD) drops on RBNZ rate cut bets
The New Zealand dollar (NZD) slumped on Wednesday as weak producer input prices reinforced expectations for another interest rate cut from the Reserve Bank of New Zealand (RBNZ).
In the absence of notable domestic data, movement in the ‘kiwi’ is likely to be tied to market risk sentiment today, which could lead to further losses if investors remain cautious.
Pound (GBP) undermined by slowing inflation
The pound (GBP) stumbled yesterday as a softening of UK inflation stoked bets for the Bank of England (BoE) rate cut next month.
Tempering these gains was a coinciding fall in UK gilt yields, which may relieve some pressure on Chancellor Rachel Reeves ahead of next week’s budget.
Looking ahead, with UK data in short supply today, budget speculation may lead to further volatility in the pound.
Euro (EUR) lifted by market risk aversion
The euro (EUR) firmed on Wednesday, with the single currency catching bids as the continued selloff in global equities rattled markets.
This gave the single currency some upward momentum, despite confirmation that Eurozone inflation eased to 2.1% in October.
Looking ahead, with Eurozone economic releases thin on the ground until the end of the week, movement in the euro may be driven by wider market trends today.
US dollar (USD) strengthens in cautious trade
The US dollar (USD) appreciated through yesterday’s session as skittish investors favoured the safe-haven currency.
Reinforcing these gains were the minutes from the Federal Reserve’s latest policy meeting, which echoed the hawkish tone struck by Fed Chair Jerome Powell in the wake of October’s policy decision.
After much delay, today finally brings the release of September’s non-farm payroll report. While technically out of date, the figures will be closely watched by USD investors, as any underperformance could swiftly revive bets for a Fed rate cut next month.
Canadian dollar (CAD) pressured by slump in oil prices
The Canadian dollar (CAD) ticked lower on Wednesday, with the commodity-linked currency being pressured by a sharp drop in oil prices.
If crude continues to slump, the ‘loonie’ will likely face further resistance today.
Data Releases
09:55 AUD RBA Connolly Speech
12:00 AUD RBA Hunter Speech
23:30 CAD PPI (Oct)
23:30 Non-Farm Payrolls (Sep)