Australian dollar (AUD) mixed as consumer confidence declines
The Australian dollar (AUD) initially wavered yesterday amid an uncertain mood and a larger-than-forecast decline in Australian consumer confidence.
AUD then managed to rise against its weaker peers during European trade as the market mood improved, although it slipped against its stronger rivals.
Turning to today, risk appetite could determine AUD’s direction over the course of the session. If an upbeat mood prevails, the ‘Aussie’ could catch bids.
New Zealand dollar (NZD) limited despite improving mood
The New Zealand dollar (NZD) found limited success yesterday, with an increase in risk appetite only providing NZD with gains against its weaker counterparts.
Market sentiment could drive the New Zealand dollar again today, with the ‘kiwi’ potentially attracting support if the mood remains risk-on.
Pound (GBP) underpinned by BoE bets
The pound (GBP) continued to attract support yesterday amid bets on a Bank of England (BoE) interest rate hike next month and the possibility of closer ties between the UK and the EU.
However, a lack of fresh UK data meant Sterling’s upside potential was limited.
British economic data remains thin on the ground today, potentially leaving the pound to trade without a clear directional bias.
Euro (EUR) stabilises as debt fears ease
The euro (EUR) crawled up yesterday following its recent selloff as calm returned to French bond markets, easing fears about a debt crisis in the Eurozone’s second-largest economy.
Additionally, EUR’s strong negative correlation with the weakening US dollar (USD) supported the euro, helping the single currency brush off a startling 10% slump in German factory orders in August.
A forecast recovery in German industrial production could support the single currency today. However, EUR investors may continue to cast nervous eyes at European bond markets.
US dollar (USD) slides as sentiment improves
The US dollar fell yesterday as an improving market mood weighed on the safe-haven ‘greenback’.
Risk appetite improved as oil prices eased, while fading bets on a Federal Reserve interest rate hike this month also cheered markets and weighed on USD.
With US economic data in short supply today, USD may trade on market risk dynamics once again. If the mood improves further, the ‘greenback’ could weaken.
Canadian dollar (CAD) drops as oil prices decline
The commodity-sensitive Canadian dollar (CAD) fell yesterday as oil prices declined, with rising Middle East exports and a G7 release of strategic reserves helping to ease supply concerns.
Crude prices could continue to drive the Canadian dollar today amid a lack of domestic data, with CAD vulnerable to losses if oil slips again.
Data releases
08:00 AUD Ai Group Industry Index (Sep)
16:00 EUR German Industrial Production (Aug)