Australian dollar (AUD) undermined by risk aversion
The Australian dollar (AUD) initially found some support yesterday after new data showed a recovery in Australian international trade in August.
However, the ‘Aussie’ came under pressure as the session unfolded due to a risk-averse market mood, with AUD/USD striking a near three-month low.
Turning to today, global risk dynamics may drive the Australian dollar. The currency could fall if an anxious mood prevails.
New Zealand dollar (NZD) struggles amid cautious trade
The New Zealand dollar (NZD) also faced headwinds yesterday, with the risk-sensitive currency striking multi-month lows against some rivals amid the risk-off mood.
Looking ahead, market risk appetite could drive NZD through the remainder of the week. If the mood remains downbeat, the ‘kiwi’ could weaken.
Pound (GBP) mixed following final PMI
The pound (GBP) traded in a wide range yesterday as the UK’s final manufacturing PMI failed to provide the currency with a clear directional bias.
The finalised index was revised marginally lower but still pointed to an improvement in factory activity last month.
With British data thin on the ground today, Sterling could end the week without a clear trajectory.
Euro (EUR) dented by USD strength
The euro (EUR) fell yesterday as the single currency came under pressure from its strong negative correlation with the rising US dollar (USD).
EUR was also dented by worries that the US could ban diesel exports to the EU amid the recent surge in oil prices.
The Eurozone’s preliminary consumer price index is the focus for EUR investors today. Rising inflation in September could lift the common currency by fuelling bets on another European Central Bank (ECB) interest rate hike.
US dollar (USD) climbs amid safe-haven demand
The US dollar marched higher yesterday as a risk-averse mood boosted demand for the safe-haven currency.
USD maintained its strength through into the evening despite a weaker-than-forecast ISM manufacturing PMI.
Today, the US non-farm payrolls report is in the spotlight. Signs of healthy hiring activity in the US could underpin USD, while a softer-than-forecast reading would likely see the ‘greenback’ slide.
Canadian dollar (CAD) rallies as oil rises
The crude-linked Canadian dollar (CAD) leapt higher yesterday as a fresh jump in oil prices boosted the currency.
A lack of Canadian data today could leave the ‘loonie’ to trade on oil price dynamics. Continued strength in crude could see CAD end the week on strong footing.
Data releases
07:00 NZD ANZ Roy Morgan Consumer Confidence (Sep)
19:00 EUR Inflation Rate (Sep)
22:30 USD Non Farm Payrolls (Sep)