Australian dollar (AUD) fluctuates amid uncertain sentiment
The Australian dollar (AUD) experienced volatility yesterday, with AUD falling sharply before rebounding on hawkish comments from Reserve Bank of Australia (RBA) Governor Michele Bullock.
The turbulence in AUD then continued into the evening as a shifting market mood left the risk-sensitive currency unable to find a clear direction.
Today, Australia’s latest PMI results could influence the ‘Aussie’. A slowdown in domestic private sector activity could put some pressure on AUD.
New Zealand dollar (NZD) strengthens on RBNZ comments
The New Zealand dollar (NZD) was also volatile yesterday, although the ‘kiwi’ managed to gain ground overall as remarks from Reserve Bank of New Zealand (RBNZ) Governor Anna Breman boosted bets on another interest rate hike.
New Zealand economic data is in short supply today. As a result, risk sentiment could drive NZD exchange rates.
Pound (GBP) subdued as public borrowing jumps
The pound (GBP) wavered yesterday, as a surge in UK government borrowing in August dampened Sterling sentiment.
However, GBP managed to avoid losses thanks to better-than-forecast manufacturing data from the Confederation of British Industry (CBI) and falling oil prices.
Looking ahead, GBP investors will likely focus their attention on the UK’s preliminary services PMI for September today. If activity moderated this month, Sterling could stumble.
Euro (EUR) uncertain in absence of data
The euro (EUR) also faced uncertain movement yesterday, as a lack of Eurozone data left the currency to be driven by external factors.
While easing oil prices soothed concerns about an energy crunch across the Eurozone, the single currency was also pressured by its strong negative correlation with the US dollar (USD), which ticked higher.
The Eurozone’s latest PMIs are also due out today, with a slight slowdown in growth potentially subduing the single currency.
US dollar (USD) wavers higher as jobs growth improves
Despite some initial turbulence, the US dollar managed to strengthen yesterday, thanks in part to new data showing a continued improvement in US employment growth.
USD was also underpinned by comments from US President Donald Trump, who threatened to ‘annihilate’ Iran if they didn’t make a deal, and indicated that any such deal would likely come after the November midterm elections.
Although less influential than the ISM surveys, the latest S&P Global PMIs for the US could impact the ‘greenback’ today. Another month of robust activity could underpin the US dollar.
Canadian dollar (CAD) flat amid wavering oil prices
The crude-linked Canadian dollar (CAD) showed resilience yesterday, despite prices wavering lower, with the ‘loonie’ managing to trade sideways against many of its peers.
If oil extends its downside today, the Canadian dollar could come under pressure. Markets will be keeping a close eye on the UN General Assembly and the rhetoric coming from Washington and Tehran.
Data releases
09:00 AUD Composite PMI (Sep)
18:00 EUR Composite PMI (Sep)
18:30 GBP Composite PMI (Sep)
23:45 USD Composite PMI (Sep)