Australian dollar (AUD) stable as risk appetite improves
The Australian dollar (AUD) held steady yesterday as an improving market mood supported the risk-sensitive currency.
However, risk appetite wasn’t strong enough to prompt notable gains for the currency, particularly after Australia’s latest leading index missed forecasts.
With Australian economic data in short supply today, market sentiment could drive AUD. If a risk-off mood returns, the ‘Aussie’ may struggle.
New Zealand dollar (NZD) initially slips despite positive data
The New Zealand dollar (NZD) initially stumbled yesterday, despite stronger-than-expected domestic consumer confidence, although NZD managed to rebound as the market mood brightened.
The ‘kiwi’ could face headwinds today after New Zealand’s GDP growth rate slowed sharply in the second quarter.
Pound (GBP) struggles following UK inflation
The pound (GBP) softened during yesterday’s European session as GBP investors seemed unimpressed by the UK’s latest consumer price index.
While headline inflation rose from 2.9% to 3.1% in August, core inflation held steady at 2.6% and both measures printed in line with forecasts. This crystallised bets that the Bank of England (BoE) will leave interest rates on hold later today.
With markets anticipating no change in policy, the focus will be on the bank’s accompanying commentary. If the BoE maintains its cautious stance, Sterling could slip.
Euro (EUR) rangebound amid industrial data
The euro (EUR) wavered yesterday following lacklustre Eurozone industrial production data.
While output contracted 0.1% in July, this was less bad than the expected 0.2% decline.
The Eurozone’s final CPI for August could underpin EUR today, if it confirms that inflation jumped last month. However, movement may be limited unless the data deviates from the preliminary estimate.
US dollar (USD) firms ahead of Fed decision
The US dollar (USD) pushed higher against its weaker peers yesterday, while holding steady elsewhere, as investors braced for the Federal Reserve’s interest rate decision.
Stronger-than-forecast US retail sales figures also supported USD, as sales growth rebounded 1.2% last month.
Turning to today, the Fed’s decision overnight could continue to influence USD movement through the session ahead. Meanwhile, risk appetite could also impact the ‘greenback’.
Canadian dollar (CAD) unsure despite weakening oil prices
The crude-linked Canadian dollar (CAD) traded without a clear direction on Wednesday, with the ‘loonie’ managing to regain some lost ground later in the session despite cooling oil prices.
Canada’s latest producer price index could influence the ‘loonie’ today. If price growth stalled in August, CAD could face some pressure.
Data releases
08:45 NZD GDP Growth Rate (Q2)
19:00 EUR Inflation Rate (Aug)
21:00 GBP BoE Interest Rate Decision
22:30 CAD PPI (Aug)
22:30 USD Initial Jobless Claims (12/Sep)