Australian dollar (AUD) pressured by energy price jitters
The Australian dollar (AUD) wavered on Friday amid further deterioration in market risk appetite.
This followed a fresh surge in oil prices, which propelled Brent crude to its highest levels since 2022.
In the absence of any notable domestic data, movement in the ‘Aussie’ is likely to remain tied to market risk dynamics at the start of this week, potentially leading to additional pressure if sentiment continues to wane.
New Zealand dollar (NZD) lifted by RBNZ rate hike bets
The New Zealand dollar (NZD) trended broadly higher on Friday, underpinned by expectations the Reserve Bank of New Zealand (RBNZ) will hike interest rates later this week.
These tightening expectations may continue to underpin the ‘kiwi’ in advance of the RBNZ’s decision on Wednesday.
Pound (GBP) undermined by slump in consumer spending
The pound (GBP) closed last week’s session on a sour note, after the UK’s latest retail sales figures reported a larger-than-expected contraction in consumer spending last month.
This offset the publication of the UK’s latest PMI data, which reported growth in the vital services sector accelerated to an eight-month high in October.
Turning to the start of this week, movement in Sterling may be subdued as investors await the publication of Chancellor John Healey’s inaugural Autumn Budget on Wednesday.
Euro (EUR) pressured by slowdown in Eurozone business growth
The euro (EUR) selling bias remained firmly in place through the end of last week as markets responded to the Eurozone’s own PMI data.
October’s preliminary figures reported a slowdown across both the manufacturing and services sectors, further dampening expectations that the European Central Bank (ECB) might be willing to hike interest rates later this week.
Coming up, the euro may claw back some support at the start of this week, if Germany’s latest IFO business climate index reports an improvement in morale this month.
US dollar (USD) upside capped by mixed PMIs
The US dollar edged higher on Friday as surging oil prices continued to rattle markets.
However, these gains proved modest, with USD demand being tempered later in the session after the latest US PMIs made for mixed reading.
US economic releases are in short supply at the start of this week, which may limit movement in the US dollar ahead of the Federal Reserve’s interest rate decision on Wednesday.
Canadian dollar (CAD) strengthens as oil prices surprise to the upside
The Canadian dollar (CAD) proved to be one of Friday’s best performers, rallying on the back of rising oil prices and stronger-than-expected domestic retail sales growth in September.
Expect the ‘loonie’ to remain in demand if oil prices continue to push higher at the start of this week.
Data Releases
19:00 EUR German IFO Business Climate (Oct)