Australian Dollar (AUD) Falls as Country’s Climate Stance Comes under Fire
The Australian Dollar (AUD) fell against several peers on Friday’s session, despite a broadly upbeat market mood.
This pullback in the ‘Aussie’ may have been attributed to Reserve Bank of Australia’s (RBA) recent warning that Australia risks investors divesting bonds or equity due to the country’s slow progress towards making a net zero emissions commitment for 2050.
Looking ahead, the publication of the RBA’s most recent minutes on Tuesday may influence the AUD exchange rates.
Pound (GBP) Firms as UK-EU Talks Hint at Progress
Pound (UK) sentiment ran high at the close of this week’s trading, as the European Union proposed generous amendments to the Northern Ireland protocol.
Despite inflammatory comments earlier in the week, negotiations between the UK and EU seem to have got off to a good start, as UK Brexit Minister Lord Frost reports being ‘quite encouraged’ as the EU has ‘definitely made an effort.’
A lack of UK data at the beginning of next week leaves GBP to find direction on external factors until Wednesday’s inflation rate release.
Euro (EUR) Dented by Underwhelming Trade Data
The Euro (EUR) stumbled on Friday on the back of poor trade data. The Eurozone balance of trade missed expectations by approximately €11bn, as imports jumped by 26.6%.
EUR exchange rates were further undermined by some dovish comments from a European Central Bank (ECB) policymaker, in which they dismissed inflation concerns.
Tuesday will see August’s Eurozone construction output revealed, potentially pressuring the Euro as the figure is expected to contract on last month.
US Dollar (USD) Wavers on High Risk Appetite
The US Dollar (USD) initially faltered at the end of last week, as risk sentiment improved and US Treasury yields fell.
However, the US dollar claw back some of these losses after retail Sales in the US printed well above expectations on Friday, encouraging bullish trading.
In today’s session, a speech from the Fed’s Randal Quarles may influence trading direction, followed by industrial production figures later on. Friday’s consumer sentiment data appears to have had little effect.
Canadian Dollar (CAD Buoyed by Stong Oil Prices
WTI oil prices climbed to a new seven-year high on Friday, bolstering the appeal of the commodity-linked Canadian Dollar (CAD).
The Bank of Canada (BoC)’s business outlook survey today may influence CAD trading ahead, alongside tomorrow’s business outlook survey indicator.
New Zealand Dollar (NZD) Climbs on Risk-On Mood
The New Zealand Dollar (NZD) rose against its peers at the end of the week, as a risk-on market mood buoyed trading sentiment. Easing concerns over China’s real-estate crisis also supported the ‘Kiwi’, as China is New Zealand’s biggest trading partner.
This morning’s inflation data may decide further movement in the New Zealand Dollar, with a 0.8% increase expected.
Data Releases
Oct 18th 07:45 NZD Inflation Rate (Q3) 4.1%
Oct 18th 19:00 USD Fed Quarles Speech N/A
Oct 18th 23:15 USD Industrial Production (Sep) 0.2%
Oct 18th 23:30 CAD BoC Business Outlook Survey N/A
Oct 19th 00:30 CAD Business Outlook Survey Indicator Q3 N/A