Australian Dollar (AUD) Climbs Despite Dovish RBA Tone
The Australian Dollar (AUD) benefitted from a return of global risk appetite yesterday. An uptick in iron ore prices may have also helped to bolster AUD against its rivals.
Expectations of a slower pace of tightening from the Reserve Bank of Australia (RBA) weighed on the ‘Aussie’, however. Additionally, further Covid-19 restrictions in China capped gains for AUD.
Looking to the day ahead, a forecast drop in both consumer and business confidence could cause the currency to slip.
New Zealand Dollar (NZD) Rises amid Risk-On Mood
The New Zealand Dollar (NZD) strengthened on Monday, lifted by its positive correlation to the Australian Dollar (AUD) and an upbeat market mood.
NZD has no data releases today, so the risk appetite and its correlation to AUD will drive the currency’s movements.
Pound (GBP) Bolstered despite GDP slowdown
The Pound (GBP) was bolstered on Monday despite downbeat GDP figures for July. Growth was slower than expected at 0.2 amid worker shortages and limited spending.
Sterling’s gains came off the back of a rapid counterattack by Ukrainian forces in their war with Russia.
Employment figures could bolster the Pound today. With unemployment forecast to remain low and wages expected to grow, the data could increase bets on further rate hikes from the Bank of England (BoE).
Euro (EUR) Gains as Eurozone Energy Prices Fall
The Euro (EUR) firmed yesterday. The single currency was bolstered amid reports of a surprise counteroffensive by Ukrainian forces. The news saw energy prices dip which helped lessen fears of an energy crisis in the Eurozone.
Major gains for EUR were likely capped by a risk-on market mood, however.
A rise to German inflation later today could have a mixed effect on EUR exchange rates. The figures could increase ECB rate hike bets, but potentially increase fears of a Eurozone recession.
US Dollar (USD) Slips as Treasury Yields Fall
The US Dollar (USD) slumped yesterday as a risk-on mood sapped demand for the safe-haven ‘Greenback’. A downturn in US treasury bond yields also weighed on the currency.
Expectations of a 0.75% interest rate hike from the Federal Reserve prevented significant losses for USD, although with markets having already priced in the hike USD remained on the defensive.
A forecast downturn in inflation later today may weigh on USD if it sees investors pare back Fed rate hike bets.
Canadian Dollar (CAD) Boosted by Jump in Oil Prices
A risk-on mood and rising oil prices helped to boost the Canadian Dollar (CAD) on Monday. The commodity-tied ‘Loonie’ gained as tight oil supplies struggled to meet strong demand.
CAD will likely be affected today by further oil price fluctuations.
Data Releases
Sep 13th 10:30 AUD Consumer Confidence Index (Sept) 80.5
Sep 13th 11:00 AUD Business Confidence (Aug) -1%
Sep 13th 16:00 GBP Unemployment Rate (Jul) 3.8%
Sep 13th 16:00 GBP Average Earnings incl. Bonus (Jul) 5.4%
Sep 13th 16:00 EUR German Inflation Final (Aug) 7.9%
Sep 13th 22:30 USD Inflation Rate (Aug) 8.1%