Australian dollar (AUD) firms as inflation remains elevated
The Australian dollar (AUD) rose yesterday as markets reacted to Australia’s latest inflation figures and the Reserve Bank of Australia’s (RBA) response.
New data showed that price pressures rose more than forecast in September, with RBA Deputy Governor Andrew Hauser telling a Senate hearing that the inflation figures were ‘too high’.
Australian economic data thins out today, potentially leaving the ‘Aussie’ to trade on market sentiment. Could a souring mood see AUD trim its recent gains?
New Zealand dollar (NZD) plummets as RBNZ holds rates
The New Zealand dollar (NZD) plunged yesterday after the Reserve Bank of New Zealand (RBNZ) surprised markets by leaving interest rates unchanged.
The ‘kiwi’ could face fresh pressure today if the latest business confidence index for New Zealand shows deteriorating morale in October.
Pound (GBP) trends lower as UK budget unveiled
The pound (GBP) softened ahead of the UK Autumn Budget yesterday, with GBP investors remaining cautious as they awaited the announcement.
Sterling then struggled to regain ground after the budget was unveiled, despite markets broadly welcoming Chancellor John Healey’s fiscal plans, as the Office for Budget Responsibility (OBR) sharply downgraded its UK growth forecast for 2027.
Turning to today, the pound could face limited movement amid a lack of fresh UK data.
Euro (EUR) edges up despite lacklustre German data
After touching fresh multi-month lows, the euro (EUR) then managed to crawl up yesterday as easing French bond yields gave the currency some respite.
However, a decline in German consumer confidence heading into November limited EUR’s recovery.
Looking forward, the focus today will be on the European Central Bank’s (ECB) interest rate decision. While a hawkish pause could support the euro, EUR could be vulnerable to losses should the bank strike a more cautious tone.
US dollar (USD) flat ahead of Fed decision
The US dollar (USD) traded broadly sideways yesterday as USD investors braced for the Federal Reserve’s interest rate decision.
A hawkish hold from the Fed then lent the ‘greenback’ some support overnight, with markets cementing bets on another rate hike before the end of the year.
Today, the focus shifts to the latest US GDP figures and core PCE price index. Accelerating economic growth in the third quarter and rising inflation in September could provide USD with a fresh boost.
Canadian dollar (CAD) underpinned by BoC hike
The Canadian dollar (CAD) firmed against its weaker rivals yesterday as the Bank of Canada (BoC) raised interest rates to 2.5%, as expected.
Looking forward, oil price dynamics could drive the crude-linked Canadian dollar today. If prices remain high, CAD could attract support.
Data releases
10:00 NZD ANZ Business Confidence (Oct)
20:00 EUR Economic Sentiment (Oct)
22:30 USD GDP Growth Rate (Q3)
22:30 USD Core PCE Price Index (Sep)
23:15 EUR ECB Interest Rate Decision