Australian dollar (AUD) rallies on RBA Kent remarks
The Australian dollar (AUD) got off to a strong start this week, rallying on the back of comments from Reserve Bank of Australia Assistant Governor Christopher Kent.
Kent questioned whether RBA monetary policy is currently restrictive enough to bring down inflation, while also cautioning against reading too much into a single month of employment data.
In the absence of any notable AUD data, expect the ‘Aussie’ to look to wider market trends for impetus today.
New Zealand dollar (NZD) benefits from upbeat mood
The New Zealand dollar (NZD) also strengthened on Monday, as upbeat Chinese GDP figures helped to boost market risk appetite.
Movement in the ‘kiwi’ will likely remain tied to market risk dynamics today, potentially leading to further gains if the mood remains upbeat.
Pound (GBP) flat ahead of high-impact data
The pound (GBP) was rangebound at the start of this week, with GBP investors reluctant to alter their positions in the currency ahead of some high-impact UK economic releases.
Upcoming releases include the UK’s latest employment, inflation and PMI figures, which will also offer more insight into the country’s fiscal resilience and influence expectations for Bank of
England (BoE) monetary policy in the coming months.
Up first is today’s jobs report, with Sterling potentially facing some headwinds if there are further signs that the UK’s labour market is slowing.
Euro (EUR) slides following French civil unrest
The euro (EUR) retreated through Monday’s session after a weekend of civil unrest raised political and fiscal uncertainty in France.
In addition to placing more pressure on the government, the unrest also triggered a fresh sell-off in France’s bond market, further driving up the cost of servicing the country’s debt.
Coming up, the euro may remain under pressure today if Germany’s latest ZEW economic sentiment index reports a deterioration of morale in the Eurozone’s largest economy this month.
US dollar (USD) pressured by positive risk flows
The US dollar was subdued yesterday as an improving market mood saps demand for the safe-haven currency.
USD sentiment was also undermined by ongoing AI stock turmoil, which continues to dampen Federal Reserve interest rate expectations.
Looking ahead, the US dollar may catch fresh bids today if the latest ADP employment figures report an acceleration of employment growth in the first week of October.
Canadian dollar (CAD) firms as rising inflation boosts BoC rate hike bets
The Canadian dollar (CAD) trended broadly higher on Monday as an acceleration in domestic inflation stoked bets that the Bank of Canada (BoC) might hike interest rates at its next meeting.
The ‘loonie’ may extend these gains today if a further rise in oil prices reinforces the appeal of the commodity-linked currency.
Data Releases
16:00 GBP Unemployment Rate (Aug)
19:00 EUR German ZEW Economic Sentiment Index (Oct)
22:15 USD ADP Employment Change (3/Oct)