Australian Dollar (AUD) Sinks on Dovish RBA Minutes
The Australian Dollar (AUD) fell against the majority of its peers yesterday as initial risk-on market mood was sapped by dovish messaging from the Reserve Bank of Australia (RBA).
The central bank reiterated its plan to extend asset purchases through until at least mid-February, while observing that GDP is expected to fall materially in Q3, with the jobless rate set to move higher.
Although Covid cases in New South Wales are down, protests in Melbourne have limited AUD gains. Looking ahead, market sentiment will likely decide ‘Aussie’ movement until AU PMIs are released on Thursday.
Pound (GBP) Trades Mixed on Gas Price Saga
The Pound (GBP) fought off downside yesterday as gas price concerns continued to weigh upon GBP sentiment. Losses were capped, however, by an initial risk-on mood.
Warnings were issued earlier in the week that the UK’s gas storage would run low within weeks if there was a Europe-wide supply crunch triggered by a severe winter. The UK’s Business Secretary Kwasi Kwarteng reassured the public that an energy price cap would remain in place to limit financial fallout.
GBP dynamics later in the week will be decided by the Bank of England (BoE)’s interest rate decision tomorrow. The central bank is expected to keep interest at 0.1%, and will likely address the recent surge in domestic inflation.
Euro (EUR) Wavers against Peers on Lack of Data
The Euro (EUR) traded in a mixed range yesterday as a lack of significant data exposed the single currency to losses. Downside was minimised, however, by erratic US Dollar (USD) trading.
The single currency was also supported by the instatement of easier travel procedures between Europe, the UK and the USA.
Looking ahead, Euro movement will likely be influenced by today’s consumer confidence release, with another drop in consumer morale likely to weigh on EUR exchange rates.
US Dollar (USD) Unsteady Ahead of Fed Decision
The US Dollar (USD) initially fell yesterday as a risk-on mood drew support away from the safe-haven currency.
However, the currency began to recoup its gains during the US trading session as the focus turned to the Federal Reserve’s upcoming interest rate decision.
Movement in the ‘Greenback’ today will be determined by the central bank’s announcement and the market’s reaction. Any hawkish messaging from Fed Chairman Jerome Powell will likely boost USD.
Canadian Dollar (CAD) Trends Down as Oil Prices Lower
The Canadian Dollar (CAD) climbed against the majority of its peers yesterday, only to sink back down as risk sentiment weakened. Oil prices rose then dipped; investors were unfazed by the disruption caused by Canada’s federal election, in which Justin Trudeau claimed victory once again.
New Zealand Dollar (NZD) Finds Support despite Consumer Confidence
The New Zealand Dollar (NZD) suffered a setback yesterday by way of falling consumer confidence in the third quarter. The data did little to dent ‘Kiwi’ prospects, however, as Australian Dollar strength early in the session buoyed NZD.
Data Releases
| Sep 22nd 18:00 | EUR | ECB Non-Monetary Policy Meeting | N/A |
| Sep 23rd 04:00 | USD | Fed Interest Rate Decision | 0.25% |