Australian Dollar (AUD) Strengthens as GDP Data Exceeds Expectations
The Australian Dollar (AUD) found support yesterday as domestic GDP in the third quarter was shown to have declined by less than expected.
The Australian economy shrank by 1.9%, compared with market expectations of a 2.7% decline, as prolonged lockdowns in New South Wales, Victoria and the Australian Capital Territory weighed upon household consumption and private investment between July and September.
Looking ahead, could a robust trade balance reading in October extend some additional support to the ‘Aussie’ today?
Pound (GBP) Firms as Brexit Tensions Ease
The Pound (GBP) climbed overall on Wednesday as Britain and France set aside their differences to tackle the migrant crisis.
According to Bloomberg, France is preparing to offer the UK proposals for an agreement with the European Union to tackle illegal immigration. French Prime Minister Jean Castex wrote to UK PM Boris Johnson on Tuesday after 27 people died crossing the channel.
A lack of data leaves Sterling to trade on external factors today; further cooperation between Britain and France may boost GBP sentiment.
Euro (EUR) Tumbles as German Retail Sales Fall
The Euro (EUR) sank through yesterday’s session as German retail sales fell, and finalised manufacturing PMIs for Germany and the Eurozone both missed expectations.
German retail sales also disappointed after reporting a 0.3% contraction, missing market expectations of a 1% rise amid supply bottlenecks. Supply constraints also affected manufacturing activity across Europe.
Eurozone employment data is likely to influence trading today. If unemployment fell in October as expected, the single currency might find support.
US Dollar (USD) Weakens on Poor Data, Risk-On Mood
The US Dollar (USD) fell back on Wednesday, amidst a prevailing risk-on mood. The currency first corrected higher, then slid further as ADP employment data revealed a drop in new hires.
America’s ISM manufacturing PMI also printed above expectations, bolstering market sentiment at the expense of the US Dollar.
Today’s jobless data is expected to show an increase in those claiming unemployment benefits, likely exerting some pressure on USD exchange rates, although this may then be countered if Federal Reserve speeches indicate a hawkish outlook on monetary policy.
Canadian Dollar (CAD) Wavers on PMI Data, Oil Dynamics
The Canadian Dollar (CAD) saw mixed movement yesterday as manufacturing activity was revealed to have fallen in November, although the sector is still performing well overall.
Oil prices all rebounded providing further support to the ‘Loonie’, despite news that the Organization of Petroleum Exporting Countries and its allies (OPEC+) sees global oil supply surpluses widening to 2m barrels per day in January, to 3.4m in February and 3.8m in March.
New Zealand Dollar (NZD) Bolstered by Risk Sentiment
The New Zealand Dollar (NZD) rose on Wednesday as risk sentiment improved. The ‘Kiwi’ also found support on AUD strength and upbeat data from China earlier in the week.
Data Releases
Dec 2nd 10:30 AUD Balance of Trade (Oct) A$11bn
Dec 2nd 10:30 AUD Retail Sales Final (Oct) 4.9%
Dec 2nd 18:00 EUR ECB General Council Meeting 100.4
Dec 2nd 20:00 EUR Eurozone Unemployment Rate (Oct) 7.3%
Dec 2nd 23:30 USD Initial Jobless Claims (27/Nov) 240K
Dec 3rd 02:00 USD Fed Quarles Speech N/A
Dec 3rd 02:30 USD Fed Bostic Speech N/A
Dec 3rd 02:30 USD Fed Barkins Speech N/A
Dec 3rd 02:30 USD Fed Daly Speech N/A