Australian dollar (AUD) retreats as sentiment sours
The Australian dollar (AUD) initially held firm yesterday as robust trade data from China underpinned the ‘Aussie’.
However, the risk-sensitive currency slipped in the evening as the market mood soured.
The focus today is on the Reserve Bank of Australia (RBA), which is expected to leave interest rates unchanged. However, if policymakers sound less hawkish following last week’s lacklustre GDP figures, AUD could stumble.
New Zealand dollar (NZD) slips amid risk-off mood
The New Zealand dollar (NZD) wavered yesterday before stumbling later in the session as market risk appetite faded.
Market sentiment could once again be the defining factor for NZD exchange rates today. Could a return to risk-on trade see the ‘kiwi’ strengthen?
Pound (GBP) rebounds despite political jitters
The pound (GBP) was initially muted yesterday amid fresh speculation that Prime Minister Keir Starmer could face a leadership challenge in the first half of 2026.
Sterling managed to rebound against its weaker rivals in the second part of the session, as an uptick in UK bond yields helped bolster GBP demand.
Bank of England (BoE) Governor Andrew Bailey is due to deliver a speech today. If he strikes a dovish tone, GBP may weaken.
Euro (EUR) undermined by USD correlation
The euro (EUR) enjoyed some support at the start of yesterday’s European session, thanks to an unexpected surge in German industrial production in October.
However, EUR pulled back against stronger rivals in the evening due to EUR’s negative correlation with a rising US dollar (USD).
Germany’s latest trade figures may impact EUR exchange rates today. Could signs of sluggish trade activity weigh on the single currency?
US dollar (USD) rises amid pre-Fed repositioning
The US dollar rose yesterday as markets scaled back their more dovish bets on the Federal Reserve’s monetary policy outlook.
USD exchange rates rose in tandem with US Treasury yields, as investors repositioned ahead of the Fed decision later this week.
The session ahead brings a last-minute flurry of US jobs data before the US central bank announces interest rates. Further signs of a slowing labour market could see USD slide.
Canadian dollar (CAD) bolstered by uptick in USD
The crude-linked Canadian dollar (CAD) was mixed yesterday, although CAD managed to firm against weaker rivals despite falling oil prices thanks to its positive correlation with USD.
Oil price dynamics could drive CAD today, although movement may be limited ahead of the Bank of Canada (BoC) policy decision on Wednesday night.
Data releases
10:30 AUD NAB Business Confidence (Nov)
13:30 AUD RBA Interest Rate Decision
17:00 EUR German Balance of Trade (Oct)
20:45 GBP BoE Gov Bailey Speech
23:15 USD ADP Employment Change Weekly
01:00 USD JOLTs Job Openings (Sep)
01:00 USD JOLTs Job Openings (Oct)