Australian Dollar (AUD) Weakens as Trade Data Disappoints
The Australian Dollar (AUD) stumbled on Thursday as AUD investors reacted to Australia’s latest trade figures.
August’s release disappointed after reporting Australia’s trade surplus unexpectedly narrowed, amid a weaker-than-expected rebound in exports.
Coming up, the Reserve Bank of Australia (RBA) will publish its latest Financial Stability Review later today. Will a cautious outlook from the RBA weigh on the ‘Aussie’
New Zealand Dollar (NZD) Slips in Risk-Off Trade
The New Zealand Dollar (NZD) softened yesterday as a prevailing risk-off mood sapped market risk appetite.
However the ‘Kiwi’ was still able to outperform the ‘Aussie’ thanks to the Reserve Bank of New Zealand’s (RBNZ) 50bps rate hike earlier in the week.
As NZD data remains thin on the ground today, expect the direction of the New Zealand Dollar to remain tied to market risk appetite.
Pound (GBP) Slips amid Risk of Credit Rating Downgrade
The Pound (GBP) trended lower against most of its peers on Thursday as GBP investors were spooked by the threat of a UK credit rating downgrade.
This came as Fitch Rating agency joined S&P in cutting its outlook for the UK’s credit rating from ‘stable’ to negative’.
In the absence of any notable GBP data releases the direction of the Pound is likely to be driven by domestic developments. Any more setbacks for Liz Truss could raise fresh questions over her premiership and lead Sterling to falter.
Euro (EUR) Muted as ECB Minutes Offer Little Insight into Next Rate Hike
The Euro (EUR) was subdued overnight, as EUR investors were disappointed that the minutes from the European Central Bank (ECB) September meeting didn’t offer any hints as to the size of the bank’s next interest rate hike.
Also weighing on the single currency was data showing a larger-than-expected contraction in German factory order growth in August.
Coming up, the release of Germany’s latest industrial production figures could pressure the Euro later this afternoon, if they disappoint similarly to the factory orders release.
US Dollar (USD) Strengthens in Bearish Trade
The US Dollar (USD) rallied on Thursday. A prevailing risk-off mood leading investors to favour the safe-haven currency.
However these gains were then tempered in overnight trade, after a surprising strong rise in initial jobless claims, prompted suggestions the US labour market might be cooling.
Closing out this week’s session will be the publication of the latest US non farm payroll release. Could another robust expansion in US employment growth bolster the US Dollar?
Canadian Dollar (CAD) Muted amid Pullback in Oil Prices
The Canadian Dollar (CAD) was subdued yesterday as a modest pullback in oil prices limited demand for the commodity-linked currency.
Canada will also publish its latest jobs figures later tonight. Expect to see the ‘Loonie’ sink if unemployment rises again in September.
Data Releases
Oct 7th 10:30 AUD RBA Financial Stability Review
Oct 7th 16:00 EUR German Industrial Production (Aug) -0.5%
Oct 7th 16:00 EUR German Retail Sales (Aug) -1.1%
Oct 7th 22:30 USD Non Farm Payrolls (Sep) 250,000
Oct 7th 22:30 CAD Unemployment Rate (Sep) 5.4%