Australian Dollar (AUD) Bolstered by Risk-On Mood
The Australian Dollar (AUD) was pushed higher by a return of global risk appetite on Wednesday. An uptick in iron ore prices also supported the commodity-linked ‘Aussie’.
The currency saw its gains limited by dovish signals from the Reserve Bank of Australia (RBA), however. In addition, surging Covid cases in China weighed on AUD.
With no significant data due today, any movement in AUD is likely to be driven by changes in risk appetite.
New Zealand Dollar (NZD) Drops following Poor Data
The New Zealand Dollar (NZD) slipped on Wednesday as an unexpected decline in New Zealand consumer confidence weighed on the ‘Kiwi’.
Poorer-than-expected balance of trade figures added to NZD’s downside, as both imports and exports rose less than forecast.
The ‘Kiwi’ has no major data releases today, so it could be affected by risk appetite.
Pound (GBP) Slumps as Borrowing Hits November High
The Pound (GBP) slipped yesterday. A sharp rise in public sector borrowing in November, fuelled by higher energy prices, pulled Sterling lower.
On the other hand, an unexpected recovery in the Confederation of British Industry’s (CBI) distributive trades survey lent support to the Pound. November’s sales balance rose to 11 versus a forecast drop to -23.
Looking ahead, the final reading of the UK’s third-quarter GDP growth rate could see Sterling fall if it prints as forecast today. The figures are expected to confirm a contraction in the UK economy.
Euro (EUR) Firms as German Consumer Confidence Recovers
The Euro (EUR) gained on Wednesday. The single currency saw a boost from a larger-than-forecast uptick in German consumer confidence.
EUR’s upward movement was restricted by a risk-on mood, however. Fresh combative comments from Russian President Vladimir Putin also weighed on the single currency.
The Euro is set to see no significant data today, meaning that the single currency may be affected by risk appetite and the Russia-Ukraine conflict.
US Dollar (USD) Rises as Consumer Confidence Beats Forecasts
The US Dollar (USD) climbed on Wednesday thanks to an above-forecast rise in December’s consumer confidence figures.
The currency also found support from hawkish bets on future action from the Federal Reserve. On the other hand, the safe-haven ‘Greenback’ came under pressure from a risk-on mood.
Looking ahead, persistently low jobless claims could see markets increase Fed bets today amid signs of a tight labour market. The final reading of third-quarter GDP growth could also impact USD, if it differs from previous estimates.
Canadian Dollar (CAD) Gains as Inflation Data Beats Forecasts
The Canadian Dollar (CAD) firmed on Wednesday. The commodity-linked ‘Loonie’ was supported by better-than-forecast inflation figures as well as climbing oil prices.
With no significant data today, CAD is likely to see movement from any shifts in oil prices.
Data Releases
Dec 22nd 17:00 GBP GDP Growth Rate (Q3) -0.2%
Dec 22nd 23:30 USD Initial Jobless Claims (17/Dec) 222,000
Dec 22nd 23:30 USD GDP Growth Rate (Q3) 2.9%