Australian dollar (AUD) rises amid risk-on mood
The Australian dollar (AUD) drifted higher yesterday as an upbeat market mood supported the risk-sensitive currency.
While sentiment shifted throughout the session, causing AUD to waver, a bullish tone ultimately prevailed.
The spotlight today falls on Australia’s latest GDP figures. If they report robust growth in the third quarter, the Australian dollar could gain ground.
New Zealand dollar (NZD) wavers amid economic worries
The New Zealand dollar (NZD) wobbled yesterday, with ongoing concerns about New Zealand’s economic outlook offsetting the risk-on market mood.
With New Zealand data absent from the calendar today, market risk appetite could determine NZD’s direction.
Pound (GBP) struggles as post-budget tensions rise
The pound (GBP) stumbled yesterday as post-budget jitters continued to chip away at Sterling’s appeal.
Tensions between the Treasury and the Office for Budget Responsibility (OBR) unsettled GBP investors, following the chaotic leaks and briefings in the run-up to the budget.
The UK’s final services PMI for November is expected to confirm that activity in the vital services sector slowed to a near standstill last month. This could undermine the pound during today’s session.
Euro (EUR) uncertain following mixed inflation figures
The euro (EUR) was mixed yesterday, with the safer single currency initially struggling amid a risk-on market mood.
A mixed consumer price index then failed to provide EUR with a meaningful upside. Although headline inflation unexpectedly ticked higher in November, core inflation held steady, rather than rising as forecast.
Confirmation of a decent expansion in service sector activity could support EUR today. Attention then turns to a speech from European Central Bank (ECB) President Christine Lagarde. The euro could rise if she strikes a hawkish tone.
US dollar (USD) undermined by risk-on mood
The US dollar (USD) lacked support yesterday as a broadly upbeat market mood saw the safe-haven currency slip against stronger rivals.
Bets for a Federal Reserve interest rate cut next week also dampened USD demand, although a lack of fresh data meant movement was limited.
Looking forward, weak jobs data for November could weigh on the US dollar today. The ‘greenback’ is unlikely to draw support from the ISM services PMI either, with activity expected to have slowed slightly in November.
Canadian dollar (CAD) pressured as oil prices fall
The commodity-sensitive Canadian dollar (CAD) also edged lower against its more successful peers yesterday, with falling oil prices dragging on the ‘loonie’.
Crude prices could continue to drive the Canadian dollar today. If oil prices soften, CAD could face headwinds.
Data releases
10:30 AUD GDP Growth Rate (Q3)
19:00 EUR Services PMI (Nov)
19:30 GBP Services PMI (Nov)
23:15 USD ADP Employment Change (Nov)
23:30 EUR ECB President Lagarde Speech
01:00 USD ISM Services PMI (Nov)