Australian Dollar (AUD) Slumps as Global Risk Appetite Retreats
The Australian Dollar (AUD) initially made gains on Tuesday. The ‘Aussie’ was bolstered by a surprise rise in business and consumer confidence.
A shift in risk appetite following US inflation figures saw AUD shed the majority of its gains, however.
With no significant data today, the Australian Dollar is likely to be affected by any shifts in risk appetite.
New Zealand Dollar (NZD) Drops amid Risk-Off Mood
The New Zealand Dollar fell yesterday. The currency suffered amid a risk-off mood following hotter-than-expected US inflation figures.
Looking ahead, the ‘Kiwi’ may remain subdued today if market risk appetite remains subdued.
Pound (GBP) Slips Despite Unemployment Fall to Lowest Point since 1974
The Pound (GBP) saw mixed movements on Tuesday. Unemployment fell to its lowest level since 1974, which initially bolstered the currency through increased Bank of England (BoE) rate hike bets.
A drop in real pay and announcement of further strike action at Felixstowe saw the currency shed its gains, however.
If inflation rises as forecast then it could have a mixed effect on GBP exchange rates. Rate hike bets could boost the Pound, although soaring costs could dampen the currency’s long-term prospects.
Euro (EUR) Falls amid Fresh Warnings of Eurozone Recession
The Euro slumped against its rivals on Tuesday. Renewed strength in the US Dollar sapped demand for the single currency.
A larger-than-expected fall in German economic sentiment also pulled EUR lower. Additionally, leading German business group BDI stated that they ‘expect Germany to enter a massive recession’.
A forecast fall in industrial production figures for the Eurozone could add to recession fears and pull EUR lower today.
US Dollar (USD) Rockets as Inflation Prints Hotter than Expected
The US Dollar (USD) soared on Tuesday after inflation figures printed higher than expected. August’s inflation figures printed at 8.3% versus forecast of 8.1%.
The data also cemented expectations of further interest rate hikes from the Federal Reserve. These rate hike bets also contributed to USD’s rise.
Looking to today, PPI figures could cap gains for USD if they fall for a second consecutive month as forecast.
Canadian Dollar (CAD) Rises amid Oil Price Recovery
The Canadian Dollar (CAD) climbed yesterday. US inflation figures may have strengthened bets on action from the Bank of Canada (BoC). A recovery in oil prices also lent support to the commodity-tied ‘Loonie’.
Oil prices are likely to be the main driver of movement for CAD today.
Data Releases
Sept 14th 08:45 NZD Current Account (Q2) NZ$-4.7b
Sept 14th 16:00 GBP Inflation Rate (Aug) 10.2%
Sept 14th 19:00 EUR Industrial Production (Jul) -1%
Sept 14th 22:30 USD PPI (Aug) -0.1%