Australian dollar (AUD) bolstered by hawkish RBA comments
The Australian dollar (AUD) closed last week’s session on a high, following comments from Reserve Bank of Australia (RBA) Governor Michele Bullock.
Speaking before a parliamentary committee, Bullock suggested that inflation remains ‘too high’, cementing bets that the RBA will hike rates again when policymakers next meet at the end of the month.
Looking ahead, these hawkish RBA bets may continue to provide underlying support for the ‘Aussie’ at the start of this week, amid a lull in domestic data.
New Zealand dollar (NZD) dented by risk-off flows
The New Zealand dollar (NZD) pressed lower on Friday amid persistent risk aversion.
The ‘kiwi’ risks extending these losses today if market risk appetite remains downbeat at the start of this week’s session.
Pound (GBP) struggles despite positive retail sales print
The pound (GBP) remained subdued at the end of last week, as GBP investors shrugged off the UK’s latest retail sales data.
While consumer spending unexpectedly rebounded in August, Sterling sentiment remained suppressed by the Bank of England’s (BoE) rate decision on Thursday.
Looking ahead, the pound may struggle for direction at the start of this week as notable UK economic data is thin on the ground.
Euro (EUR) unfazed by ECB Lagarde comments
The euro (EUR) was muted on Friday as markets absorbed the latest comments by European Central Bank (ECB) President Christine Lagarde.
Lagarde suggested the bank has yet to see any second-round effects from inflation and reiterated that policymakers will set rates on a meeting-by-meeting basis.
In the absence of any EUR macroeconomic releases, movement
US dollar (USD) bolstered by plunge in the yen
The US dollar (USD) outperformed most of its peers on Friday as the currency was the primary beneficiary of the weakness in the Japanese yen (JPY).
These gains were underpinned further by market caution, following suggestions from US President Donald Trump that the US could resume its strikes on Iran.
Turning to the start of this week, the US dollar may continue to catch bids if risk appetite continues to be buffeted by geopolitical uncertainty.
Canadian dollar (CAD) dips as oil prices soften
The Canadian dollar (CAD) traded with modest losses on Friday as a weakening of oil prices limited demand for the commodity-linked currency.
Expect movement in the ‘loonie’ to remain tied to oil price dynamics through Monday’s session, with further losses likely if we see a further moderation.