Australian dollar (AUD) slides as Japan-China tensions simmer
The Australian dollar (AUD) faced selling pressure yesterday as the recent tensions between China and Japan showed no signs of cooling.
A broader risk-off market mood also pressured the ‘Aussie’, leaving the currency facing notable losses against some peers.
Australia’s latest inflation rate could boost AUD today, as headline inflation is expected to have edged up from 3.5% to 3.6% in October, potentially fuelling hawkish Reserve Bank of Australia (RBA) bets.
New Zealand dollar (NZD) falls amid risk-averse trade
The New Zealand dollar (NZD) also weakened yesterday, with the gloomy market mood sapping demand for the risk-sensitive ‘kiwi’.
The Reserve Bank of New Zealand’s (RBNZ) interest rate decision is the key event for the ‘kiwi’ today. While the bank is likely to deliver a quarter-point cut, any signals that the official cash rate is close to neutral levels could support NZD.
Pound (GBP) ticks higher ahead of autumn budget
The pound (GBP) firmed yesterday amid some last-minute repricing ahead of the UK’s autumn budget.
News that Chancellor Rachel Reeves would not launch a tax raid on banks seemed to support Sterling, while a small recovery in the bond market also cheered GP investors.
Expect to see significant volatility in the pound today as investors react to the budget. While the pound is poised to fall if markets are unimpressed, there is a chance of a short-term relief rally for Sterling as the recent uncertainty comes to an end.
Euro (EUR) climbs amid Ukraine peace hopes
The euro (EUR) rose against many of its rivals yesterday amid ongoing optimism around peace talks to end the Russia-Ukraine war.
These hopes helped the euro shrug off some lacklustre German data, which confirmed that the Eurozone’s largest economy stalled in the third quarter.
Any further developments on the Ukraine peace proposal could impact EUR again today. If the tone remains positive, the common currency may strengthen.
US dollar (USD) weakens as Fed rate cut bets mount
The US dollar (USD) fell yesterday as new US data fuelled bets on a Federal Reserve interest rate cut next month.
The ADP weekly employment change report showed that private US employers cut 13,500 jobs per week on average from mid-October to early November. Meanwhile, US retail sales slowed far more than expected in September.
USD could face headwinds today, if the latest American data prints as forecast. US durable goods orders are set to have slowed rapidly in September, while new jobless claims are expected to have risen last week.
Canadian dollar (CAD) softens in tandem with oil
The commodity-linked Canadian dollar (CAD) stumbled yesterday as crude prices continued to fall amid the optimism around a Ukraine peace plan.
With Canadian data still absent from the calendar today, oil prices could continue driving CAD. If crude extends its downside, the ‘loonie’ may also face headwinds.
Data releases
10:30 AUD Inflation Rate (Oct)
11:00 NZD RBNZ Interest Rate Decision
22:30 GBP Autumn Budget 2025
23:30 USD Durable Goods Orders (Sep)
23:30 USD Initial Jobless Claims (22/Nov)