Australian Dollar (AUD) Slips after Dovish RBA Signals
The Australian Dollar (AUD) ticked lower yesterday. A risk-off mood weighed on the ‘Aussie’.
AUD also suffered after dovish signals from the Reserve Bank of Australia (RBA) after the central bank’s minutes hinted at a slower pace of rate hikes.
A speech from RBA Deputy Governor Michele Bullock could prompt further losses in AUD if she reiterates the RBA’s dovish stance.
New Zealand Dollar (NZD) Tumbled amid Fresh USD Strength
The New Zealand Dollar (NZD) tumbled on Tuesday. The drop was driven by NZD’s correlation to the Australian Dollar (AUD), as well as renewed strength in the US Dollar (USD).
The ‘Kiwi’ is likely to be affected by its correlation to other currencies today.
Pound (GBP) Bolstered by BoE Rate Hike Bets
The Pound (GBP) edged higher against many of its rivals on Tuesday. Expectations that the Bank of England (BoE) will go ahead with a 0.75% interest rate hike later this week bolstered Sterling.
Gains for the currency were capped by news of widespread strike action, however. The news added to the UK’s poor long-term outlook.
A drop in industrial trends figures could dent confidence in the Pound later this evening if they print as forecast.
Euro (EUR) Slides as Russia Opens Referendums for Occupied Regions
The Euro (EUR) slumped against many of its rivals due to fresh USD demand. News that Russia-occupied areas of Ukraine will hold referendums on joining the Russian Federation also weighed on EUR.
Comments from European Central Bank (ECB) officials hinting that the central bank will pursue further rate hikes underpinned the Euro, however.
A speech from ECB President Christine Lagarde could increase ECB rate hike bets and push EUR higher today.
US Dollar (USD) Leaps amid Possibility of 1% Fed Rate Hike
The US Dollar (USD) soared on Tuesday ahead of the Federal Reserve’s interest rate decision. The safe-haven ‘Greenback’ benefitted from a risk-off environment.
Bets on aggressive action from the Fed also supported the currency’s gains. Markets have increasingly priced in a 0.75% rate hike with some bets on a greater 1% interest rate increase.
The US Dollar may continue to strengthen ahead of the Fed’s data decision later tonight. If the Fed delivers a 1% hike it could turbocharge USD exchange rates.
Canadian Dollar (CAD) Dips as Inflation Surprises to Downside
The Canadian Dollar (CAD) fell yesterday after figures indicated inflation falling by more-than-expected in August. The commodity-tied ‘Loonie’ was underpinned by a rise in oil prices, however.
With no significant data, movement in CAD is set to be driven by any fluctuations in crude oil prices.
Data Releases
Sep 21st 12:00 AUD RBA Bullock Speech
Sep 21st 20:00 GBP CBI Industrial Trends Orders (Sep) -11
Sep 22nd 04:00 USD Fed Interest Rate Decision 3.25%