Australian Dollar (AUD) Falls as RBA Decision Disappoints
The Australian Dollar (AUD) retreated yesterday, following the Reserve Bank of Australia’s (RBA) latest policy decision.
The RBA left interest rates unchanged at a record low of 0.1% during its September meeting, as widely expected. Officials then announced that government bonds would be bought at A$4 billion a week until at least mid-February – a longer period than expected.
The central bank also confirmed that GDP is expected to fall in Q3, accompanying a rise in the jobless rate.
This afternoon, RBA representative Guy Debelle is due to make a scheduled speech: any hawkish references to the bank’s forward guidance may bolster the Australian Dollar.
Pound (GBP) Suffers as Political Concerns Escalate
The Pound (GBP) weakened on Tuesday. addition to topical concerns over coronavirus and the Northern Ireland protocol, British citizens now have to contend with a confirmed rise in National Insurance tax, to pay for health and social care.
The announcement provoked criticism across the board, most notably from opposition leaders. Prime Minister Boris Johnson, meanwhile, argues that ‘no one foresaw a global pandemic.’
On Friday, UK GDP data is scheduled, with the potential to dent trading sentiment if growth contracts, as expected.
Euro (EUR) Firms as Euro Area GDP Impresses
The Euro (EUR) rose against the majority of its peers yesterday on promising GDP data from the Eurozone. GDP grew by 2.2% in the second quarter – more than the 2% expected.
The German ZEW economic sentiment index capped Euro gains, however, by printing below forecasts. This month’s figure is the lowest it’s been since March 2020.
Looking ahead, the European Central Bank’s (ECB) interest rate decision and press conference on Thursday will likely be in focus for EUR investor, and could limit movement in the Euro in the meantime.
US Dollar (USD) Strengthens Despite Risk-On Trading
Trading optimism supported the US Dollar (USD) yesterday, despite a risk-on mood and lack of significant data.
Treasury yields ticked up and futures tied to US stocks edged higher helping to boost ‘Greenback’ sentiment, while the reopening of US markets following the extended weekend also offered support.
Coming up will another robust US job openings reading help the US Dollar to sustain its upward momentum later tonight?
Canadian Dollar (CAD) Faces Headwinds as Oil Prices Founder
The Canadian Dollar (CAD) fell against the majority of its peers yesterday, as a lack of significant data left the ‘Loonie’ vulnerable. WTI price losses were extended as Saudi Arabia cut its official selling prices to Asia by at least $1 per barrel.
The Bank of Canada (BoC) will publish its interest rate later tonight, likely inspiring further movement.
New Zealand Dollar (NZD) Falls in Line With Australian Dollar
The New Zealand Dollar (NZD) suffered losses yesterday, as there was no market-moving data to support the currency. The ‘Kiwi’s main driver was movement in the Australian Dollar, as a result of the positive correlation between the two.
‘Aussie’ price dynamics will likely continue to direct NZD through the remainder of the week.
Data Releases
Sep 8th 18:10 AUD RBA Debelle Speech N/A
Sep 8th 24:00 CAD Ivey PMI (Aug) 56
Sep 8th 24:00 CAD BoC Interest Rate Decision 0.25%
Sep 8th 24:00 USD JOLTs Job Openings (Jul) 10m