Australian Dollar (AUD) Slumps as Risk-Off Mood Prevails
The Australian Dollar (AUD) fell against the majority of its peers yesterday as a risk-off mood dominated the markets in the wake of the Federal Reserve and Bank of England’s (BoE) policy decisions.
In addition, Australia’s trade surplus fell in September, from a record high of A$14.74bn to A$12.24bn. Exports tumbled to a three-month low; imports also fell by a softer 1%.
Looking ahead, Australia’s Ai group services index may influence AUD trading today, with a return to growth in the index forecast.
Pound (GBP) Plummets as BoE Strike Dovish Tone
The Pound (GBP) nosedived on Thursday afternoon as the Bank of England (BoE) left interest rates unchanged, as well as its quantitative easing programme.
Just two policymakers voted to raise interest rates at October’s monetary policy meeting, with others citing a need for more employment data.
BoE Governor Andrew Bailey has been cast in former Governor Mark Carney’s ‘unreliable boyfriend’ role, as analysts accuse him of hinting one way and acting another, actively raising hopes of an imminent rate hike.
A speech from BoE MPC member Dave Ramsden may influence trading in today’s session.
Euro Trades Mixed on Lower-Than-Expected Data
The Euro (EUR) faced headwinds yesterday as German factory orders printed lower than forecast, and the finalised Eurozone services PMI fell from preliminary estimates.
The weaker rebound in factory orders suggests that recovery in Germany’s manufacturing is losing momentum, while inflationary pressures in the Eurozone continue to build, with service providers registering the strongest increases in costs and selling prices for just over 21 years.
German industrial production data may influence trading later, alongside Eurozone retail sales.
US Dollar (USD) Buoyed by Risk-Off Mood
The US Dollar (USD) found support on Thursday, as a risk-averse market mood supported the safe-haven currency.
Investors mulled over the Federal Reserve’s interest rate decision, finding comfort in the promise of reduced asset purchases from mid-November. Although hopes of an early rate hike were disappointed, the forward guidance had been widely anticipated given September’s signalling.
Today, the US Dollar is likely to find support on October’s nonfarm payroll data, which is expected to reveal 450K new jobs.
Canadian Dollar (CAD) Strengthens on Oil Trajectory
Prices of WTI crude advanced yesterday, on expectations that the Organization of Petroleum Exporting Countries (OPEC) and its allies would decline to increase oil production, despite high demand. Consequently, the Canadian Dollar (CAD) enjoyed tailwinds.
Also supporting the ‘Loonie’, Canada’s trade balance exceeded expectations, with a surplus increase of C$350mn.
Employment data today is likely to influence trading, with Canada’s unemployment rate forecast to fall for a fifth consecutive month.
New Zealand Dollar (NZD) Wavers on Lack of Data
The New Zealand Dollar (NZD) traded down overall on Thursday, amidst risk-off trading sentiment. A lack of data exposed NZD to losses.
Data Releases
Nov 5th 11:30 AUD RBA Statement on Monetary Policy N/A
Nov 5th 17:00 EUR German Industrial Production (Sep) 1%
Nov 5th 18:30 EUR German Construction PMI (Oct) 49.1
Nov 5th 20:00 EUR Eurozone Retail Sales (Sep) 0.3%
Nov 5th 22:15 GBP BoE Ramsden Speech N/A
Nov 5th 22:30 CAD Employment Change (Oct) 50K
Nov 5th 22:30 CAD Unemployment Rate (Oct) 6.8%
Nov 5th 22:30 USD Nonfarm Payrolls (Oct) 450K
Nov 5th 22:30 USD Unemployment Rate (Oct) 4.7%
Nov 5th 23:00 GBP BoE Tenreyro Speech N/A
Nov 6th 00:00 CAD Ivey PMI (Oct) 65