Australian Dollar (AUD) Stumbles on Energy Crisis, Inflation Concerns
The Australian Dollar (AUD) weakened against its peers on Friday as inflation concerns plagued investors, alongside energy crisis headwinds and ongoing disruptions to global supply chains. Risk sentiment varied on economic insecurity.
Further weighing upon the Australian Dollar, were concerns that lockdown easing may be coming too quickly in the state of New South Wales. NSW Premier Dominic Perrottet announced an accelerated reopening last week, with all children to return to school on 25 October.
Looking ahead, tomorrow’s business confidence data may influence Australian Dollar trading. If September’s release reports a further contraction as predicted, the ‘Aussie’ may face headwinds.
Pound (GBP) Wavers as French MP Retaliates to Fishing Dispute
The Pound (GBP) traded in a mixed range on Friday, as France’s stepped up its rhetoric as it accuses the UK of ‘violating the terms of the Brexit agreement’, in its dispute about fishing licences.
French MP Jean-Pierre Pont suggested tearing up the Touquet Treaty, which currently allows British border checks to be carried out in France.
GBP losses were capped in the afternoon as the US Dollar fell on poor employment data – the Fed is less likely now to withdraw monetary stimulus in November, the prospect of which buoys global markets. Employment data tomorrow will likely be the next significant driver of GBP sentiment.
Euro (EUR) Finds Support on USD Weakness
Friday saw mixed movements for the Euro (EUR) as German data printed below expectations: yet US Dollar (USD) weakness lent some support to the single currency, as a result of the strong negative correlation between USD and EUR.
The single currency climbed against several peers in the afternoon, despite the release of Germany’s smallest trade surplus since May 2020 and rising gas prices. Experts have indicated that power shortages may occur this winter.
German economic sentiment tomorrow may direct further movement in the Euro, exerting downside pressure if sentiment falls as expected.
US Dollar (USD) Tumbles as Nonfarm Payrolls Miss Expectations
The US Dollar saw significant losses on Friday as key employment data printed below expectations. US nonfarm payrolls for the month of September revealed that only 194K jobs were created, as opposed to the 500K expected.
Nonfarm employment is down by 5 million – or 3.3% – from pre-pandemic levels, with declines in public education and healthcare sector jobs weighing upon last month’s figure.
Further employment data due on Wednesday may help USD to recoup some of last week’s losses, as JOLT job openings for the month of August are expected to decline only slightly on the previous month’s figure.
Canadian Dollar (CAD) Firms as Jobs Data Impresses
The Canadian Dollar (CAD) enjoyed significant support on Friday, as jobs data revealed that Canadian employment is back up to pre-pandemic levels. Employment change figures reached 157.1k, massively exceeding the 65K expected.
In addition, oil prices reversed yesterday’s losses, nearing multi-year highs of $80 per barrel as demand remains strong.
New Zealand Dollar (NZD) Sinks on Lack of Data
The New Zealand Dollar (NZD) fell at the end of last week’s session, as a lack of significant data exposed the currency to losses. AUD headwinds subdued NZD trading, as New Zealand’s second-biggest trading partner floundered amid inflation concerns.