Australian Dollar (AUD) Fought Headwinds over Poor Data Forecast
The Australian Dollar (AUD) fell against the majority of its peers yesterday as a lack of relevant data exposed the ‘Aussie’ to losses.
Economists at Westpac confirmed that vaccine hesitancy in Australia is waning, potentially leading to restriction easing and an economic rebound- but tempered the good news with predictions of a ‘dire’ week in data. Experts forecast a loss of 175 jobs in the month of August.
NAB business confidence will also print next week, on Tuesday – and is expected to drop by thirteen points as a result of lockdown restrictions and ongoing Covid concerns.
Pound (GBP) Climbs on BoE Optimism
Despite a flare-up of Brexit tensions between the Northern Ireland Democratic Unionist Party (DUP) and the Republic of Ireland, the Pound (GBP) was trended higher against most its peers yesterday.
Buoyed by optimistic comments from Bank of England (BoE) officials, Sterling shrugged off any headwinds posed by a lack of UK data. BoE officials Dave Ramden and Silvana Tenreyo concurred in their respective reports that a recent rise in inflation is likely to be temporary and policy tightening should soon commence.
A clutch of UK data today will likely drive GBP movement in the session ahead. If the UK’s GDP 3-month average drops on last month as predicted, Sterling could come under pressure.
Euro (EUR) Sinks on Central Bank Uncertainty
The Euro (EUR) retreated on Thursday, following the European Central Bank’s (ECB) latest policy decision.
Whilst announcing that it would start slowing the pace of its pandemic emergency purchase programme (PEPP), ECB President Christine Lagarde went out of her way to state this does not constitute a tapering of its bond-purchases, leading the Euro to fall.
A lack of EU data today means that trading sentiment will likely be driven by investors’ reactions as they continue to digest the ECB’s commentary. A pickup in the US Dollar (USD) could also weigh upon the Euro.
US Dollar (USD) Falls on Low Treasury Yields, Employment Issues
The US Dollar saw losses through yesterday’s session as falling treasury yields combined with ongoing staff shortages, depressed trading sentiment.
Commenting on the Federal Reserve’s forward guidance, New York’s Fed President John Williams said that more progress is needed in the labour market to achieve ‘substantial further progress’, pushing the US Dollar lower.
Yesterday’s jobless claims fell by more than expected, but seemed to do little for the ‘Greenback’: tomorrow’s Producer Price Index may direct movement in the absence of any other significant data.
Canadian Dollar (CAD) Gains on Oil Dynamics
The Canadian Dollar (CAD) managed to firm yesterday as WTI crude oil rose in price on declining output from the Gulf of Mexico. Less supply means more demand for crude, bolstering the oil-sensitive ‘Loonie’.
Looking ahead, CAD could extend this uptrend through the end of this week’s session, assuming Canadian’s unemployment rate is shown to have fallen as expected last month.
New Zealand Dollar (NZD) Strengthens on Risk-On Trading
The New Zealand Dollar (NZD) rose against its peers yesterday, bolstered by strength in its risk-on peers. The New Zealand Dollar often mirrors the trajectory of AUD, but in this instance found support on a spike in domestic manufacturing sales.
Data Releases
Sep 10th 02:00 CAD BoC Governor Macklem Speech
Sep 10th 04:00 USD Fed Williams Speech
Sep 10th 16:00 GBP Industrial Production (Jul) 0.4%
Sep 10th 16:00 GBP GDP 3-Month Avg (Jul) 3.8%
Sep 10th 22:30 CAD Employment Change (Aug) 100K
Sep 10th 22:30 USD PPI (Aug) 8.2%