Australian Dollar (AUD) Climbs as Evergrande Fears Abate
The Australian Dollar (AUD) rose against its peers on Monday as fears that China’s Evergrande would default again were unfounded. The company came up with its $83.5m bond interest payment at the last minute.
Also raising AUD sentiment, half a million students in New South Wales returned to school for the first time since June: across the state.
Given a lack of data today and tomorrow, the Australian Dollar will likely find further direction on risk sentiment.
Pound (GBP) Buoyed by Brexit Optimism
Despite a lack of UK data yesterday, Pound (GBP) exchange rates firmed overall. GBP was supported by Brexit optimism,
While petrol prices soared to new highs, UK officials reported that talks on the Northern Ireland protocol were ‘constructive’ – buoying Pound sentiment.
Today’s session may see the Pound subdued over yesterday’s dovish comments from Bank of England (BoE) policymaker Silvana Tenreyro, who considers that that inflation drivers are short-lived.
Euro (EUR) Slides as German Data Disappoints
The Euro (EUR) fell on Monday following disappointing data from Germany. The Ifo Business Climate indicator dropped to 97.7 in October 2021 as supply bottlenecks weighed upon factory output.
Factory closures in Asia exacerbated the problem, as experts observe that shortages of intermediate goods are spilling over to other sectors of the economy, threatening supplies of Christmas gifts.
Into today, EUR dynamics are likely to be influenced by a speech from the European Central Bank (ECB)’s Andrea Enria, as well as any significant movement in the US Dollar (USD).
US Dollar (USD) Firms on Bond Yields, Fed Tapering Optimism
Rising US Treasury yields underpinned US Dollar (USD) strength yesterday, supported by anticipation of a tapering announcement from the Federal Reserve.
Fed Chair Jerome Powell indicated on Friday that the US central bank is on track to start winding down asset purchases. His announcement came with a caveat that interest rates should remain unchanged.
Looking ahead, a disappointing release from the Chicago Fed national activity index may weigh upon the US Dollar today, as reduced consumer confidence for the month of October could also put pressure upon the ‘Greenback’.
Canadian Dollar (CAD) Trades Mixed Despite Crude Oil Highs
The Canadian Dollar (CAD) prospered on Monday as WTI prices extended a seven-year high amidst growing demand. Economies are using more energy as they spring into action after the pandemic.
While beneficial for the Canadian economy, rocketing fuel prices are causing concerns elsewhere as the price of petrol in the UK hits a new record. Meanwhile, risk-on trading supported several of CAD’s peers, limiting Canadian Dollar upside.
New Zealand Dollar (NZD) Edges Up on Risk-On Mood
The New Zealand Dollar (NZD) found support yesterday as a risk-on market mood buoyed trading sentiment. Strength in the Australian Dollar buoyed the currency, alongside fading concerns over property developer Evergrande.
Data Releases
Oct 26th 20:00 GBP CBI Distributive Trades (Oct) 13
Oct 26th 22:45 EUR ECB Enria Speech N/A
Oct 27th 00:00 USD CB Consumer Confidence (Oct) 108.3
Oct 27th 07:45 NZD Balance of Trade (Sep) N$-91m