Australian dollar (AUD) weakens in risk-off trade
The Australian dollar (AUD) drifted lower on Monday, amid a prevailing risk-averse market mood.
This, in turn, prompted some AUD investors to book their profits, following last week’s gains.
The minutes from the Reserve Bank of Australia’s (RBA) September policy meeting will be the primary focus for AUD investors today, with the ‘Aussie’ potentially weakening if they hint that appetite for further tightening has diminished amongst policymakers.
New Zealand dollar (NZD) dented by risk aversion
The New Zealand dollar (NZD) also softened yesterday amid the downturn in market risk appetite.
Expect the ‘kiwi’ to remain on the defensive today, so long as investors continue to err on the side of caution.
Pound (GBP) buoyed by hopes for closer UK-EU ties
The pound (GBP) appreciated against the majority of its peers at the start of this week amid fresh hopes for future UK-EU relations.
This followed remarks from Prime Minister Andy Burnham, who claimed that rejecting a closer relationship with the European Union would amount to a ‘dereliction of duty’.
Looking ahead, support for Sterling could be tested later today, if one of the Bank of England’s (BoE) most dovish policymakers continues to question the need to tighten monetary policy.
Euro (EUR) extends French-debt selloff
The euro (EUR) remained on the defensive on Monday as it continued to be undermined by France’s debt crisis.
Government borrowing costs continued to rise yesterday, amid doubts that it will be able to push through a proposed €43bn in spending cuts through parliament.
France’s parliament will begin its debate on the government budget later today, where opposition to its new fiscal plans could pile more pressure on the euro.
US dollar (USD) firms amid geopolitical uncertainty
The US dollar (USD) opened this week’s session on positive footing, amid an uptick in demand for safe-haven assets.
This followed a fresh wave of geopolitical uncertainty, linked to concerns over energy flows through the Red Sea, as well as a very tenuous ‘energy ceasefire’ between Russia and Ukraine.
USD will likely maintain its bullish momentum through the coming session as sentiment remains broadly downbeat.
Canadian dollar (CAD) strengthened by rising oil prices
The Canadian dollar (CAD) trended broadly higher on Monday, as global oil prices accelerated to a fresh two-week high.
Assuming that energy prices remain elevated, the ‘loonie’ may continue to catch bids through today’s session.
Data releases
10:30 AUD Business Confidence (Sep)
10:30 AUD RBA Minutes
02:00 GBP BoE Dhingra Speech