Australian Dollar (AUD) Ticks Higher amid Risk-On Flows
The Australian Dollar (AUD) firmed yesterday. The risk-sensitive currency attracting support amid improving market sentiment.
The risk-on mood appeared linked to comments from the Governor of the People’s Bank of China (PBOC), Yi Gang, in which he claimed China’s economy remains broadly on track and the house market is now ‘stable’.
The ‘Aussie’ could see further gains today if the country’s trade surplus widens as forecast.
New Zealand Dollar (NZD) Climbs as Unemployment Remains Close to Record-Lows
Upbeat domestic data helped to bolster the New Zealand Dollar (NZD) on Wednesday. Third quarter unemployment remained close to record lows, although a risk-off mood capped gains.
With no data today, the ‘Kiwi’ is likely to be affected by risk appetite.
Pound (GBP) Subdued Ahead of BoE Interest Rate Decision
The Pound (GBP) slipped yesterday as investors awaited the Bank of England’s (BoE) interest rate decision. The possibility of a below-forecast rate hike weighed on Sterling.
GBP also saw losses amid the UK’s worsening cost-of-living crisis. Food inflation figures indicated that fresh food prices rose by 13.3% in October, its largest increase since 2005.
Economists are expecting a dovish tilt from the BoE today regardless of the size of the rate hike, which could weigh on GBP.
Euro (EUR) Mixed amid Risk-Off Mood and Downbeat Data
The Euro (EUR) benefitted from a risk-off mood yesterday, prompting it to climb against its riskier rivals.
Gains for the single currency were limited by disappointing German data. An above forecast contraction in Eurozone manufacturing also weighed on EUR.
The Euro could regain some lost ground if unemployment remains close to record lows as forecast.
US Dollar (USD) Volatile after Fed Rate Hike
The US Dollar (USD) saw muted bets throughout most of Wednesday as investors awaited the Federal Reserve’s interest rate decision. Markets had largely priced in a 75bps rate hike from the Fed.
The fallout from the Fed’s decision injected volatility into the currency, however. A risk-off mood also lent support to the safe-haven ‘Greenback’.
Evidence of a contraction in US private sector performance could weigh on USD today if ISM non-manufacturing PMI figures print as forecast.
Canadian Dollar (CAD) Drops amid Slide in Oil Prices
The Canadian Dollar (CAD) slipped on Wednesday. The commodity-tied ‘Loonie’ was pulled lower by tumbling crude oil prices and a risk-off mood.
A narrowing of the country’s trade surplus could weigh on CAD today.
Data Releases
Nov 3rd 10:30 AUD Balance of Trade (Sep) A$8.85bn
Nov 3rd 20:00 EUR Unemployment Rate (Sep) 6.6%
Nov 3rd 22:00 GBP BoE Interest Rate Decision 3%
Nov 3rd 22:30 CAD Balance of Trade (Sep) C$1.34bn
Nov 3rd 22:30 USD Balance of Trade (Sep) -$72.2bn
Nov 3rd 00:00 USD ISM Non-Manufacturing PMI (Oct) 55.5