- Australian Dollar slides amid risk-off mood – China woes and US federal deadlock worry investors.
- Pound softens as UK outlook remains bleak – Recent forecasts see long-term stagnation.
- US Dollar hits fresh ten-month high – Profit-taking sees USD retreat.
- Euro gains ground as sentiment sours – USD pullback aids EUR.
Australian Dollar (AUD) Stumbles as Sentiment Sours
The Australian Dollar (AUD) fell yesterday as a souring market mood dragged the risk-sensitive currency lower.
Concerns about China’s struggling property sector and fears of a federal shutdown in the US weighed heavily on global risk appetite.
Today, AUD investors will be focused on Australia’s latest consumer price index. Could an expected uptick in inflation boost Reserve Bank of Australia (RBA) interest rate hike bets, thereby lifting the ‘Aussie’?
New Zealand Dollar (NZD) Drops amid Anxious Trade
The New Zealand Dollar (NZD) also softened yesterday as the riskier ‘Kiwi’ succumbed to the bearish market mood.
Amid a lack of economic data today, risk appetite could continue to drive NZD. If the downbeat mood prevails, the ‘Kiwi’ could face headwinds.
Pound (GBP) Struggles amid Gloomy UK Outlook
The Pound (GBP) remained on the defensive during Tuesday’s session amid ongoing worries about the British economy.
Recent economic outlooks for the UK published by financial firms all point to long-term stagnation and a potential end to Bank of England (BoE) interest rate hikes.
UK data remains thin on the ground today, so we may see Sterling continue to trade in a narrow range near recent lows.
Euro (EUR) Rises amid Risk-Off Mood
The Euro (EUR) firmed yesterday as the safer single currency enjoyed the cautious market sentiment.
EUR also benefitted from its negative correlation with the US Dollar (USD), which witnessed a pullback during European trading hours.
Looking ahead, Germany’s latest consumer confidence report could dent EUR. Economists expect morale to have slipped to a six-month low heading into October.
US Dollar (USD) Retreats from Ten-Month High
The US Dollar initially gained ground yesterday, with the prevailing risk-off impulse in markets lifting the safe-haven currency to a fresh ten-month high.
However, USD trimmed its gains during the European trading session, with the ‘Greenback’ perhaps suffering some profit-taking.
Tonight, the latest US durable goods orders data is due out. With forecasters anticipating another contraction in orders, USD could stumble.
Canadian Dollar (CAD) Weakens alongside Oil
The crude-linked Canadian Dollar (CAD) weakened yesterday as a drop in oil prices dragged the ‘Loonie’ lower.
In the ongoing absence of Canadian data today, oil prices may continue to drive CAD movement. Could more weakness in oil see the Canadian Dollar stumble?
Data Calendar
Sep 27th 11:30 AUD Monthly CPI Indicator (Aug) 5.2%
Sep 27th 16:00 EUR GfK Consumer Confidence (Oct) -26
Sep 27th 22:30 USD Durable Goods Orders (Aug) -0.5%
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