Australian Dollar (AUD) Falls Afoul of Profit-Taking
The Australian Dollar (AUD) initially strengthened this week as a cheery market mood boosted the risk-sensitive ‘Aussie’.
However, AUD was unable to sustain its upside. After hitting multi-week highs against some peers, the ‘Aussie’ succumbed to some profit-taking.
Turning to today, the highly anticipated Reserve Bank of Australia (RBA) interest rate decision is coming up this afternoon. Markets expect the RBA to leave rates unchanged, but hints of a future hike could lift AUD.
New Zealand Dollar (NZD) Under Pressure despite Buoyant Market Mood
The New Zealand Dollar (NZD) struggled to capitalise on an improving risk sentiment and weakened throughout yesterday’s session.
Looking ahead, without any data of note the New Zealand Dollar could trade in tandem with the ‘Aussie’ today on the back of the RBA interest rate decision.
Pound (GBP) Climbs despite Gloomy Economic Outlook
The Pound (GBP) posted a modest recovery after last week’s sour end to the session as Bank of England (BoE) rate hike bets supported the currency.
However, ongoing fears about the impact of higher borrowing costs on the UK’s struggling economy capped Sterling’s gains.
Turning to this evening, a confirmation of a contraction in the UK’s vital service sector could weigh on Sterling by raising recession fears.
Euro (EUR) Muted by ECB Uncertainty
The Euro (EUR) wavered yesterday as declining exports in Germany were compounded by falling investor confidence in the Eurozone.
A speech from European Central Bank (ECB) President Christine Lagarde also failed to rally the Euro as she called for central banks to keep inflation expectations anchored.
As for today, a flurry of ECB speeches could cause movement. The Euro could face pressure if expectations of an interest rate pause grow.
US Dollar (USD) Quiet as Markets Close for Labor Day
The US Dollar (USD) traded listlessly yesterday as markets in North America were closed in observance of Labor Day.
While a risk-on mood kept the safe-haven ‘Greenback’ under pressure, movement was limited.
Turning to today, without any further major data to go by, the US Dollar could trade on risk appetite. Will an ongoing upbeat mood weigh on USD?
Canadian Dollar (CAD) Weakens amid Oil Price Turbulence
The Canadian Dollar (CAD) was left exposed to oil price dynamics amid thin trading conditions yesterday, with volatility in crude seeing the commodity-linked ‘Loonie’ stumble.
Looking ahead, CAD data remains in short supply today. Therefore, oil prices could continue driving the Canadian Dollar. Will more volatility hurt the ‘Loonie’?
Data Releases
5th Sep 14:30 AUD RBA Interest Rate Decision 4.1%
5th Sep 17:00 EUR ECB President Lagarde Speech
5th Sep 18:00 EUR Services PMI Final (Aug) 48.3
5th Sep 18:00 EUR ECB Consumer Expectation Survey
5th Sep 18:30 GBP Services PMI Final (Aug) 48.7
5th Sept 19:00 EUR PPI (Jul) -0.6%