Australian Dollar (AUD) Tumbles as Lowe Hints at Slower RBA Rate Hikes
The Australian Dollar (AUD) struggled yesterday. AUD began the day on the backfoot after the country’s trade surplus shrank below forecasts to A$8.733b.
The ‘Aussie’ also suffered after a dovish speech from Reserve Bank of Australia (RBA) Governor Philip Lowe.
Looking ahead, the latest inflation figures from China could influence AUD exchange rates. Will another uptick in inflation dent the Australian Dollar?
New Zealand Dollar (NZD) Slips amid Risk-Off Mood
The New Zealand Dollar (NZD) fell on Thursday due to its positive correlation to the Australian Dollar (AUD). A gradual retreat in risk appetite may have also weighed on the ‘Kiwi’.
A predicted rise in inflation in China could pull NZD lower today if it weakens market risk appetite.
Pound (GBP) Falls PM’s Announcement of Energy Support Package
The Pound (GBP) slipped yesterday despite the announcement of the UK’s support package for energy costs.
Whilst some economists predicted the measures might ease the risk of a recession, others stated that the high cost of the plan could cause inflation to soar. This poor outlook weighed on Sterling.
With no data today, the Pound is likely to affected by the response to the support package and Bank of England (BoE) rate hike bets.
Euro (EUR) Ticks Lower after ECB Interest Rate Decision
The Euro (EUR) edged lower against its rivals on Thursday. The slide came in the face of a 0.75% interest rate by the European Central Bank (ECB), the largest since the central bank’s inception.
A sharp downward revision of growth predictions for 2023 that came alongside the announcement appeared to be a key factor in the Euro’s decline.
An emergency meeting by EU energy ministers will be in focus today, as EUR investors hope for a comprehensive plan to deal with the current crisis.
US Dollar (USD) Bolstered as Powell Signals Further Action Still to Come
The US Dollar (USD) saw steady gains yesterday amid risk-off flows. A fall in jobless claims to a three-month low also bolstered USD.
Sustained bets on further interest rate hikes from the Federal Reserve also lent support to USD yesterday. Speaking on Thursday, Fed Chair Jerome Powell signalled that the central bank would continue to hike rates ‘until we get the job done’.
Speeches from Fed policymakers could boost USD today if they reiterate the Fed’s hawkish stance.
Canadian Dollar (CAD) Drops alongside Fall in Crude Oil Prices
The Canadian Dollar (CAD) slipped yesterday amid a drastic downturn in crude oil prices fuelled by demand fears.
Today’s forecast uptick in domestic unemployment in August could weigh on CAD if investors see it as undermining future rate hikes from the Bank of Canada (BoC).
Data Releases
Sep 9th 11:30 CNY Inflation Rate (Aug) 2.8%
Sep 9th 11:30 CNY PPI (Aug) 3.1%
Sep 9th 22:30 CAD Unemployment Rate (Aug) 5%
Sep 9th 22:30 CAD Employment Change (Aug) 15,000