Australian dollar (AUD) stumbles as consumer confidence weakens
The Australian dollar (AUD) wavered lower on Tuesday as an unexpected decline in domestic consumer confidence dented AUD.
While the ‘Aussie’ was initially able to rebound off its lowest levels, it faced renewed selling pressure in the evening.
Amid a lack of notable Australian economic data today, AUD could trade primarily on market risk appetite. Could a risk-on mood boost the ‘Aussie’?
New Zealand dollar (NZD) softens amid risk-off trade
The New Zealand dollar (NZD) also trended lower yesterday as a cautious mood sapped demand for the risk-sensitive currency.
Notable New Zealand data is also thin on the ground today, likely leaving NZD to be driven by global risk dynamics. If a risk-on mood prevails, the ‘kiwi’ could climb.
Pound (GBP) rallies as data beats forecasts
The pound (GBP) strengthened yesterday, despite UK unemployment climbing to a four-year high, as the latest British jobs report showed signs of resilience and stubbornly high wage growth.
In addition, the UK’s preliminary services PMI for December beat forecasts to show an unexpected acceleration in activity.
Today the spotlight falls on the UK’s latest consumer price index. An anticipated easing of inflation in November could weigh on the pound, with any unexpected results potentially triggering volatility.
Euro (EUR) wavers higher amid mixed data
The euro (EUR) was mixed yesterday, although it managed to gain ground against weaker rivals, amid mixed economic data.
The Eurozone’s PMIs for December missed forecasts to show a decline in business activity this month. However, Germany’s ZEW economic sentiment index unexpectedly rose to strike a five-month high.
Germany’s latest business climate indictor is due out today. With little change anticipated, EUR may be muted. However, a surprise reading could lead to more notable movement in the euro.
US dollar (USD) weakens amid signs of slowing jobs market
The US dollar (USD) slipped to fresh multi-month lows yesterday as markets digested the latest US jobs data.
The long-delayed non-farm payrolls reports pointed to a weakening labour market, while US unemployment rose from 4.4% in September to 4.6% in November, reinforcing bets on multiple interest rate cuts from the Federal Reserve next year.
Looking forward, speeches from two Fed officials could determine USD’s direction today. If both policymakers strike a dovish tone, the ‘greenback’ could suffer further losses.
Canadian dollar (CAD) dented by falling oil prices
The crude-linked Canadian dollar (CAD) also faced selling pressure yesterday, as falling oil prices dragged the ‘loonie’ lower.
Turning to today, oil prices could continue to drive CAD movement amid a lack of Canadian data. If crude falls further, the ‘loonie’ could also struggle.
Data releases
17:00 GBP Inflation Rate (Nov)
19:00 EUR German Ifo Business Climate (Dec)
23:15 USD Fed Waller Speech
00:05 USD Fed Williams Speech