Australian Dollar (AUD) Tumbles after Disappointing PMIs
The Australian Dollar (AUD) slumped amid a risk-off mood yesterday, with poor domestic PMI figures also weighing on AUD. The country’s dominant services sector saw its first contraction since January 2022.
The risk-sensitive ‘Aussie’ also suffered amid a further surge in Chinese Covid-19 cases. Key Chinese economic data also failed to meet the country’s targets.
The latest federal budget could help to shore up the currency if it delivers on Treasurer Jim Chalmers’ promise of a ‘solid, simple, and sensible’ plan.
New Zealand Dollar (NZD) Drops amid Risk-Off Mood
The New Zealand Dollar (NZD) tumbled yesterday amid a risk-off market mood. Below-target Chinese economic data as well as the ‘Kiwi’s’ positive correlation to Australian Dollar also weighed on NZD.
The currency is set to be affected by risk appetite today. Will another slump in market sentiment push the ‘Kiwi’ even lower?
Pound (GBP) Strengthens as Sunak Confirmed as PM
The Pound (GBP) was bolstered yesterday by the confirmation that Rishi Sunak would be the UK’s next Prime Minister.
Poor PMI figures kept pressure on Sterling, however. UK business activity fell to its lowest level since January 2021, adding to fears that the country could be close to falling into a recession.
Data from the Confederation of British Industry (CBI) could add to woes for the country’s private sector. Business confidence and industrial orders are both forecast to fall.
Euro (EUR) Firms amid Aggressive ECB Rate Hike Bets
The Euro (EUR) benefitted from a drop in risk appetite on Monday. Aggressive bets on further interest rate hikes from the European Central Bank (ECB) also bolstered the single currency.
Significant gains for EUR were capped by a fall in private sector output, however. Private sector performance across the Eurozone contracted for the third consecutive month.
A drop in German business confidence for October could add to the downbeat outlook for Eurozone businesses and pull EUR lower.
US Dollar (USD) Climbs Despite Reduced Fed Bets & Downbeat PMIs
The US Dollar (USD) initially weakened on Monday, extending Friday’s losses stemming from speculation that the Federal Reserve would slow its pace of interest rate hikes. A risk-off mood then helped the safe-haven Greenback to recover some lost ground.
Finally for USD, an above-forecast fall in private sector output capped gains for the currency. Higher cost-of-living and soaring prices saw growth in the services sector continue to shrink.
With no significant data scheduled for today, the currency could be affected by market mood and Fed rate hike bets.
Canadian Dollar (CAD) Falls as Oil Prices Slide
The Canadian Dollar (CAD) slipped on Monday. A sharp drop in crude oil prices prompting losses in the commodity-tied ‘Loonie’.
CAD is likely to remain sensitive to any further movement in oil markets today.
Data Releases
Oct 25th 18:00 EUR German Ifo Business Climate (Oct) 83.3
Oct 25th 18:30 AUD Federal Budget
Oct 25th 20:00 GBP CBI Industrial Trends Orders (Oct) -12
Oct 25th 20:00 GBP CBI Business Optimism Index (Q4) -40