Australian dollar (AUD) climbs amid RBA bets
The Australian dollar (AUD) pushed higher yesterday as a risk-on mood and hawkish Reserve Bank of Australia (RBA) bets underpinned the ‘Aussie’.
The RBA’s meeting minutes published on Tuesday continued to provide AUD with support, as Goldman Sachs said they open the door to a possible interest rate hike in November.
Australia’s latest jobs report takes centre stage today. Could an expected increase in employment provide AUD with support?
New Zealand dollar (NZD) gives up gains as mood sours
The New Zealand dollar (NZD) initially firmed yesterday amid a risk-on mood, but fell in the evening as sentiment soured.
With New Zealand data thin on the ground today, market risk appetite may remain the key factor for NZD. If the mood shifts, the ‘kiwi’ could face further volatility.
Pound (GBP) uncertain following BoE comments
The pound (GBP) faced uneven movement yesterday, with Sterling losing ground against stronger peers amid a lack of UK data.
GBP may have been influenced by comments from Bank of England (BoE) Chief Economist Huw Pill. While Pill suggested interest rates would need to rise, he also pushed back on markets pricing four rate hikes by September 2027.
Turning to the session ahead, the spotlight is on the UK’s latest GDP figures. An expected 0.1% contraction in August could weigh on the pound.
Euro (EUR) hits fresh lows on French fiscal fears
The euro (EUR) extended its recent selloff yesterday, hitting fresh multi-month lows, as fears of a French debt crisis continued to plague the currency.
Comments from European Central Bank (ECB) President Christine Lagarde also dented EUR, after she dampened rate hike bets by saying the bank isn’t yet seeing second-round inflation effects.
Today, the Eurozone’s latest industrial production figures are unlikely to offer EUR much support, as markets expected output in the bloc to have stalled in August.
US dollar (USD) catapulted higher by US CPI
The US dollar (USD) surged yesterday after the latest US consumer price index showed headline and core inflation accelerated more than expected in September.
The data revived bets that the Federal Reserve could raise interest rates this month, with market odds for a 25-basis-point hike in October jumping from 22% to 47%.
Looking forward, the latest US producer price index and retail sales are due out today, with USD investors potentially focusing on the latter. With sales growth expected to have sharply slowed in
September, the ‘greenback’ could come under pressure.
Canadian dollar (CAD) buoyed by high oil prices
The crude-linked Canadian dollar (CAD) strengthened yesterday as oil prices remained elevated, while CAD’s positive correlation with the US dollar also supported the currency.
Oil price dynamics could drive the Canadian dollar today. If crude prices hold near recent highs, the ‘loonie’ could attract further support.
Data releases
10:30 AUD Unemployment Rate (Sep)
16:00 GBP GDP (Aug)
19:00 EUR Industrial Production (Aug)
22:30 USD PPI (Sep)
22:30 USD Retail Sales (Sep)