Australian Dollar (AUD) Firms on Bullish Trading
The Australian Dollar (AUD) trended up against the majority of its peers yesterday as a bullish market mood helped bolster AUD.
Risk sentiment appeared to be driven in part by continued weakness of the US Dollar as well as hopes that most countries will be able to avoid further lockdowns.
Looking ahead, tomorrow’s PMI data is likely to direct further AUD movement.
Pound (GBP) Sinks on Lower-Than-Expected September Inflation
The Pound (GBP) traded on the defensive on Wednesday, struggling to attract support in the wake of the UK’s latest consumer price index.
According to the Office for National Statistics (ONS), inflation slowed from a nine-year high of 3.2% to 3.1% in September, missing forecasts and dampening expectations for a Bank of England (BoE) rate hike next month.
Looking ahead, the Confederation of British Industry’s (CBI) industrial trends index may provide fresh direction to the Pound later this evening.
Euro (EUR) Wavers as Inflation Tailwinds Outweighed by Dovish ECB
The Euro (EUR) fluctuated yesterday as upwardly revised CPI in the bloc failed to outweigh European Central Bank (ECB) headwinds.
According to the final Eurozone CPI report for the month of September, consumer prices came in at 3.4% on a yearly basis, in line with the flash estimate amidst a 17.6% year-on-year surge in energy prices and a 2.0% rise in the costs of food, alcohol and tobacco.
While rising inflationary pressures are encouraging the majority of central banks to tighten their monetary policy, the ECB maintains that inflation in the Euro area is ‘still mostly transitory’.
Overnight consumer confidence in the Eurozone may influence EUR trading, with a drop in consumer morale this month potentially weakening the Euro.
US Dollar (USD) Pressured by Risk-On Mood
The US Dollar (USD) struggled to climb on Wednesday amidst a prevailing risk-on mood, which sapped the appeal of the safe-haven ‘Greenback’.
This offset a rise in US Treasury yields which may have otherwise helped to support the US Dollar.
Looking ahead, risk sentiment may decline in the run up to this weekend’s debt deadline for Chinese property giant, Evergrande, potentially boosting USD. Meanwhile, US jobless claims look to have fallen over the last four week period – if this is confirmed today, ‘Greenback’ may find support.
Canadian Dollar (CAD) Subdued by High Inflation
The Canadian Dollar (CAD) traded unevenly yesterday as inflation data confirmed the Bank of Canada (BoC)’s suspicions that higher rates would last longer than initially expected. The annual inflation rate went up to 4.4% in September of 2021 from 4.1% in August.
Into today’s session, employment data may influence CAD trading, alongside further crude oil appreciation.
New Zealand Dollar (NZD) Rallies on Bullish Market Mood
The New Zealand Dollar (NZD) rose against its peers on Wednesday as high risk-sentiment supported the risk-on currency, alongside rising bets for an additional Reserve Bank of New Zealand (RBNZ) rate hike to combat inflationary pressures.
Data Releases
Oct 21st 20:00 GBP CBI Industrial Trends Orders (Oct) 19
Oct 21st 20:00 GBP CBI Business Optimism Index (Q4) 15
Oct 21st 22:30 CAD ADP Employment Change (Sep) 51K
Oct 21st 22:30 USD Initial Jobless Claims (Oct) 300K
Oct 21st 22:30 USD Jobless Claims 4-wk Average (Oct) 320.25K
Oct 21st 23:00 USD Fed Waller Speech N/A
Oct 22nd 00:00 EUR Eurozone Consumer Confidence Flash (Oct) -5
Oct 22nd 05:00 AUD RBA Gov Lowe Speech N/A
Oct 22nd 08:00 AUD Markit Manufacturing PMI Flash (Oct) 56
Oct 22nd 08:00 AUD Markit Services PMI Flash (Oct) 48