Australian Dollar (AUD) Dips as Risk-Off Mood Prevails
The Australian Dollar (AUD) fell against the majority of its peers yesterday as the market mood turned bearish ahead of the Federal Reserve’s interest rate decision.
‘Aussie’ losses were capped by upbeat data from China, as the Caixin services PMI for October printed above expectations. As Australia’s biggest trading partner, China’s positive data supported AUD.
Australia’s trade balance is likely to influence trading today, along with the country’s finalised retail sales release for September.
Pound (GBP) Supported by Upwardly Revised PMI
The Pound (GBP) trended up on Wednesday as the UK’s finalised Markit/CIPS services PMI for October was revised up from 58 to 59.1.
The reading signalled the strongest pace of recovery since July: the reopening economy and looser travel restrictions helped to boost demand, particularly in hospitality, leisure and transportation.
Looking ahead, with Bank of England (BoE) policymakers appearing divided over whether now is the right time for a rate hike, the Bank of England (BoE)’s interest rate decision will direct Pound movement, whatever the decision.
Euro (EUR) Buoyed by Employment Data
The Euro (EUR) traded in a mixed range yesterday as upbeat employment data lent support, while moderate strength in the US Dollar applied downside.
Unemployment in the bloc edged down to its lowest level since April 2020 as the number of unemployed decreased by 255K amid higher demand for labour as Covid restrictions eased.
Finalised Eurozone services PMIs for October and September’s German factory orders may drive additional movement in EUR later as investors respond to the Fed’s rate decision.
US Dollar (USD) Fluctuates as Fed Announces Rate Decision
The US Dollar (USD) wavered on Wednesday as investors awaited the Fed’s interest rate decision, and the ISM non-manufacturing PMI indicated stronger-than-expected growth in the service sector in October.
Growth in the US service sector hit a three-month high, with the reading coming in at 66.7, above the forecast 62, and well above September’s figure.
Following the Federal Reserve’s monetary policy announcement earlier this morning, USD exchange rates will likely continue being driven by investor reaction.
Canadian Dollar (CAD) Sinks on Lowering Oil Prices
The Canadian Dollar (CAD) fell yesterday as oil prices broke a three-day uptrend; volume went down for the second session in a row, by around 46.7K contracts.
Into today, Canada’s balance of trade will be revealed, with September’s surplus expected to have fallen from last month’s.
New Zealand Dollar (NZD) Edges up Overall on Employment Data, Rate Hike Expectations
The New Zealand Dollar (NZD) climbed yesterday as investors digested Tuesday’s employment data. New Zealand’s unemployment rate fell to an all-time low in the third quarter of 2021.
Data Releases
Nov 4th 10:30 AUD Balance of Trade (Sep) A$12.2bn
Nov 4th 10:30 AUD Retail Sales Final (Sep) 1.3%
Nov 4th 17:00 EUR German Factory Orders (Sep) 2%
Nov 4th 18:55 EUR German Markit Services PMI Final (Oct) 52.4
Nov 4th 19:00 EUR Eurozone Markit Services PMI Final (Oct) 54.7
Nov 4th 19:30 GBP Construction PMI (Oct) 52
Nov 4th 22:00 GBP BoE Interest Rate Decision 0.1%
Nov 4th 22:30 CAD Balance of Trade (Sep) C$1.55bn
Nov 4th 22:30 USD Balance of Trade (Sep) $-80.5bn
Nov 4th 22:30 USD Initial Jobless Claims (Oct/30) 275K
Nov 5th 07:30 AUD Ai Group Services Index (Oct) 52