Australian dollar (AUD) buoyed by RBA minutes
After an initial stumble yesterday, the Australian dollar (AUD) then managed to trend higher as the Reserve Bank of Australia’s (RBA) latest meeting minutes showed that policymakers were open to further interest rate hikes.
Additionally, an improving market mood helped to underpin the risk-sensitive ‘Aussie’.
Market risk sentiment may be the key influence on AUD exchange rates today, with the Australian dollar potentially attracting support if the mood remains upbeat.
New Zealand dollar (NZD) recovers as mood improves
The New Zealand dollar (NZD) also initially softened yesterday before marching higher as the market mood grew increasingly risk on.
Amid a lack of New Zealand data today, risk appetite could continue driving the ‘kiwi’. NZD may enjoy ongoing support if an upbeat mood prevails.
Pound (GBP) unsure despite growth upgrade
The pound (GBP) lacked a clear trajectory yesterday, while slipping against its stronger peers, as GBP investors digested the International Monetary Fund’s (IMF) revised growth forecast for the UK.
While the IMF upgraded its growth forecast for 2026, it also slightly downgraded its outlook for 2027.
A speech from Bank of England (BoE) Governor Andrew Bailey is the key event for GBP today, with any hawkish remarks potentially supporting Sterling.
Euro (EUR) recovery falters ahead of France budget debate
The euro (EUR) attracted some support early on during yesterday’s session, thanks to a dip in French bond yields and EUR’s negative correlation with the weakening US dollar (USD).
However, the common currency relinquished its gains as investors braced for France’s parliamentary debate on the 2027 budget, which could reignite debt fears amid potential opposition from parties on the right and left.
Turning to today, European Central Bank (ECB) President Christine Lagarde is scheduled to speak. The euro may face headwinds if she raises concerns about the current debt crisis in France.
US dollar (USD) falls as risk appetite increases
The US dollar faced headwinds yesterday as an improving market mood dampened demand for the safe-haven currency.
The risk-positive tone came as oil prices eased from their recent two-week highs, while government bond markets around the world also showed signs of steadying.
The focus for USD investors today will be the latest US consumer price index. An expected acceleration in inflation in September could propel the ‘greenback’ higher.
Canadian dollar (CAD) rebounds as oil starts to rise
The commodity-linked Canadian dollar (CAD) initially faced pressure yesterday amid the pullback in global oil prices. However, crude prices jumped again in the evening, helping CAD find renewed strength.
Looking forward, a speech from Bank of Canada (BoC) Governor Tiff Macklem could impact the Canadian dollar today. If he hints that rate hikes may not be necessary, CAD could stumble.
Data releases
15:30 GBP BoE Gov Bailey Speech
16:05 CAD BoC Gov Macklem Speech
18:30 EUR ECB President Lagarde Speech
22:30 USD Inflation Rate (Sep)