Australian Dollar (AUD) Slides as Business Investment Tumbles
The Australian Dollar (AUD) was able to make gains against the Euro but slumped against the US Dollar on Thursday as traders awaited a key speech from the Federal Reserve’s Jerome Powell.
Meanwhile, the latest data from Australia weighed on the currency as it showed business investment fell by the most in four years in the second quarter. However, the ‘Aussie’ found some support as future spending plans remained intact which markets took as a hopeful sign of recovery.
Looking ahead, due to a lack of economic data it is likely the Australian Dollar will continue to react to wider market sentiment during today’s session. If risk sentiment deteriorates further, it will weigh on AUD.
Pound (GBP) Traders Await BoE Bailey’s Speech
The Pound (GBP) remained largely flat, suffering some losses against the US Dollar as traders awaited monetary policy hints at the Jackson Hole symposium.
The British currency shrugged off another bout of Brexit pessimism as German Chancellor Angela Merkel removed Brexit from the agenda of next week’s EU ambassadors meeting due to a lack of progress in negotiations.
Sterling traders will continue to focus on the Jackson Hole symposium as the Bank of England (BoE) Governor, Andrew Bailey, is due to speak at the event. Markets will be looking out for any hints of negative interest rates which would weigh on GBP sentiment.
Euro (EUR) Struggles despite Evidence of France’s Strong Recovery
The Euro (EUR) remained largely flat but suffered losses against the US Dollar during Thursday’s session as market attention turned to the US central bank.
EUR suffered losses despite France’s Finance Minister Bruno Le Maire stating that the economic contraction in the bloc’s second largest economy may not be as deep as previously thought. The latest evidence showed that the country’s business confidence rebounded in August thanks to a strong recovery in recent months.
Looking ahead the single currency could attempt to claw back some losses if the latest German consumer confidence jumps more than expected. However, dire French Q2 growth data could limit any EUR gains.
US Dollar (USD) Left Near One-Week Low Ahead of Fed Powell’s Speech
The US Dollar (USD) remained near a one-week low ahead of the Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium.
In his speech, the Fed chief noted that the low inflation is a ‘cause for concern’ and the bank will allow inflation to run above 2% in an aggressive new strategy to restore the US to full employment and boost inflation.
Earlier data revealed the number of Americans filing for unemployment benefits hovered around one million which suggests the labour market recovery is stalling in the world’s largest economy.
Looking ahead, traders are likely to continue looking for signs the recovery in the US economy has slowed as the latest personal income data is expected to slump once again in July.
Canadian Dollar (CAD) Under Pressure as Hurricane Laura Hits
The Canadian Dollar (CAD) remained under pressure on Thursday as oil prices eased as Hurricane Laura made landfall in the heart of the US oil industry.
The hurricane hit earlier than expected in southwestern Louisiana, one of the most powerful to hit the state. Meanwhile, oil prices shrugged off the latest US crude inventory falls which suggests demand in the US is improving.
Today could see the ‘Loonie’ suffer losses following the release of the latest Canadian GDP data. The Canadian economy is expected to shrink by around 12% in Q2, sending the country into a recession.
New Zealand Dollar (NZD) Struggles as Fed Launches Aggressive New Strategy
The New Zealand Dollar (NZD) remained largely flat during yesterday’s session as markets eagerly awaited a speech from the US Federal Reserve’s Jerome Powell.
The riskier ‘Kiwi’ remained under pressure as the Fed rolled out an aggressive new strategy to help restore the country’s struggling labour market and boost inflation.
Looking ahead, ‘Kiwi’ traders are likely to react to wider market sentiment due to a lack of economic data releases today.
Upcoming Data
16:00 EUR German GfK Consumer Confidence (Sep) 2.5
16:45 EUR France GDP Final (Q2) -13.8%
19:00 EUR Economic Sentiment (Aug) 85.5
19:00 EUR Consumer Confidence (Aug) -14.7
22:30 CAD GDP (Q2) -38%
22:30 USD Personal Income (Jul) -0.4%
22:30 USD Personal Spending (Jul) 1.2%
23:05 GBP Governor Bailey Speech