Australian Dollar (AUD) Edges Up as NSW Lifts Restrictions
The Australian Dollar (AUD) firmed against several of its peers through Monday’s trading session, as lockdown measures were lifted in New South Wales.
With retailers allowed to open for the first time in over 100 days, NSW’s Premier Dominic Perrottet commented that while case numbers and hospitalisations will continue to rise, it is important for businesses to reopen.
Looking ahead, today’s NAB business confidence report may extend additional support to the ‘Aussie’, if sentiment continued to improve last month.
Pound (GBP) Climbs on BoE Optimism
The Pound (GBP) found support yesterday as upbeat comments from Bank of England (BoE) policymaker Michael Saunders raised investors’ morale.
The Monetary Policy Committee member warned that households should brace for the BoE to start raising interest rates ‘significantly earlier’ than previously thought, as inflation climbs higher, with some GBP investors pricing in the possibility of a rate hike from the bank before the end of 2021.
Employment data for August is due to print today, and may support the Pound, if unemployment continues to fall and wage growth remains robust.
Euro (EUR) Range Bound on Risk-Off Headwinds
The Euro (EUR) came under pressure on Monday as global inflationary concerns and energy woes subdued market mood.
Households are already facing higher bills, as energy intensive industries have started to slow production: ‘swing supplies’, one of Europe’s contingency solutions in times of high energy demand, has been compromised by the shutting of the bloc’s largest gasfield.
Today’s economic sentiment indexes from German and the Eurozone are likely to drive EUR movement going forward; potentially denting Euro prospects if morale retreats further.
US Dollar Fluctuates on Mixed Trading Stimuli
The US Dollar (USD) traded in a narrow range against its peers yesterday, as hopes of imminent bond purchase tapering from the Federal Reserve lent upside support amidst generally downbeat trading impetus.
Weighing upon ‘Greenback’, however, was a generally upbeat market mood, in spite of concerns that Chinese firm ‘Evergrande’ will miss another debt repayments deadline.
Jobs data in tomorrow’s session is likely to influence USD trading sentiment ahead: with 10.925m job openings expected for the month of August, downside from last week’s nonfarm payroll data may be reversed.
Canadian Dollar (CAD) Trades Mixed on Bank Holiday
The Canadian Dollar (CAD) trended broadly higher yesterday, although Canada’s Thanksgiving Holiday limited significant movement in the ‘Loonie’.
Crude prices have continued to rise into Monday’s session, exceeding $81 per barrel, as demand remained high as oil becomes a more economical fuel alternative to gas.
New Zealand Dollar (NZD) Firms on AUD Strength
The New Zealand Dollar (NZD) climbed overall yesterday despite a lack of significant data, as strength in the Australian Dollar lent upside support to the ‘Kiwi’. As New Zealand’s second-biggest trading partner, AU tailwinds generally buoy NZD.
The New Zealand Dollar may face headwinds ahead, however, if coronavirus cases in the country increase following the abandonment of a zero-Covid policy.
Data Releases
Oct 12th 10:30 AUD NAB Business Confidence (Sep) -2
Oct 12th 16:00 GBP Avg Earnings Incl. Bonus (Aug) 7%
Oct 12th 16:00 GBP Unemployment Rate (Aug) 4.5%
Oct 12th 19:00 EUR Eurozone ZEW Economic Sentiment Index (Oct) 20
Oct 12th 19:00 EUR German ZEW Economic Sentiment Index (Oct) 28.5
Oct 13th 00:00 USD JOLTs Job Openings (Aug) 10.925m