AUD, NZD Up on Risk Demand after US Consumer Confidence Slumps

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Headlines

  • ‘Aussie’ Rises on US Data - Poor US figures help improve demand for risky currencies
  • AUD/GBP Climbs on UK Wage Growth Outlook - Think tank warns real wages will continue falling in 2018
  • AUD/EUR Climbs on Greek Bailout Worries - Greeks unconvinced bailout exit will go smoothly in August
  • USD Slumps on Sizeable Drop in Consumer Confidence - Sentiment declines further-than-forecast in December

Australian Dollar

The Australian Dollar was boosted during yesterday’s trading session by market unease ahead of this morning’s US consumer confidence survey results. Demand for the ‘Aussie’ was also improved by a report from the UK-based Centre for Economics and Business Research (CEBR) that predicted in the next decade Australia would jump from 13th to 11th in the ranking of largest global economies.

Sterling

The Australian Dollar to Pound Sterling exchange rate climbed yesterday thanks to a warning over the pace of UK wage growth in 2018. The Resolution Foundation predicted that pay growth would trail behind inflation for the entire year, meaning that in real terms wages would continue to fall.

UK loans for house purchase data are scheduled for release this evening.

Euro

The Euro was on largely solid form yesterday, helped by the anticipation ahead of – and subsequent fallout from – the US consumer confidence data release. Weighing on EUR slightly were survey findings that showed Greek citizens are not confident that the country will be able to smoothly exit from its bailout programme late in 2018.

The European Central Bank (ECB) will release its latest economic bulletin this evening.

US Dollar

Markets spent most of yesterday awaiting the US sentiment data, as it was the only top-tier economic data release on the calendar for the entire session. The US Dollar was weak thanks to forecasts of a minor decline, but later slumped after the actual results were much worse-than-expected. The confidence index dropped from 128.6 to 122.1.

The US has more high-tier data set for release today, so the currency markets could behave much as they have today ahead of the advance goods trade balance data for November late tonight.

Canadian Dollar

The Canadian Dollar was on mixed form yesterday, having recently been pushed up by crude oil prices hitting a two-and-a-half-year-high. This made AUD and NZD the more attractive commodity currencies yesterday in the wake of poor US data, as the ‘Loonie’ had already used up some of its potential for gains.

New Zealand Dollar

There was no New Zealand data on the economic calendar yesterday, but NZD benefitted greatly from the latest weak US data. The ‘Kiwi’ recorded mostly strong gains versus its peers, although was unable to escape from opening levels against the Australian Dollar.

Data Released

December 28th 19.00 EUR ECB Publishes Economic Bulletin
December 28th 19.30 GBP BBA Loans for House Purchase (NOV)
December 28th 23.30 USD Advance Goods Trade Balance (NOV)

Post by TorFX

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