US rate decision & Brexit news in focus this week

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  • Quiet Week Leaves Australian Dollar Struggling – AUD slips against the majors
  • Pound Bounces Back – Sterling recoups losses vs. EUR, USD, AUD
  • German Data Boosts Euro – Sturdy confidence supports EUR exchange rates
  • FOMC Interest Rate Decision Ahead – USD puts on a patchy performance.

Australian Dollar Dips on Data-Light Week 

Last week’s positive AUD movement failed to continue on Monday, with the commodity-driven Australian Dollar dipping by around half a cent against the US Dollar, Pound and Euro.

With Australian data in extremely short supply this week, the US interest rate decision and trade tensions are likely to be the driving forces behind any Australian Dollar fluctuations. 

Pound Sterling Advances on the Majors

After plummeting at the tail end of last week, the Pound spent Monday’s European session clawing back losses against currencies like the US Dollar, Euro and Australian Dollar.

Sterling support came as Brexit Minister Dominic Raab implied that he’s still confident that a Brexit agreement can be reached.

GBP advanced by almost 1% against the ‘Aussie’ and ‘Kiwi’ and rallied by over 0.5% against the US Dollar and Canadian Dollar. Its gains against the Euro were more modest as the common currency derived support from German confidence data.

However, with no notable UK data on the cards today Sterling may be unable to continue this momentum in the hours ahead.

Euro Boosted by German Confidence Stats

While the Euro slipped slightly against the Pound at the start of the week, it put in a more impressive performance against the other majors.

The Euro was modestly bolstered as the latest IFO business confidence data for Germany came in above forecasts.

According to IFO President Clemens Fuest: ‘Despite growing uncertainty, the German economy remains robust.’

Today’s German wholesale price index is unlikely to have much of an impact on EUR exchange rates unless it deviates significantly from forecasts.

US Dollar Fluctuates Ahead of FOMC Decision

US Dollar movement was limited on Monday as investors held back ahead of the upcoming Federal Reserve interest rate decision, with USD easing lower against the Pound and Euro but recording modest gains against the Australian Dollar.

The Dallas Fed Manufacturing Activity Index for September also failed to lend the US Dollar much support, with the gauge unexpectedly slipping from 30.9 to 28.1.

We could see the US Dollar spike mid-week if the Fed hikes interest rates and implies that another adjustment is likely before the end of the year.

Canadian Dollar Weakened by NAFTA Concerns

The Canadian Dollar weakened against some rivals yesterday, with CAD exchange rates softening in response to concerns that the US and Canada will fail to reach a new NAFTA agreement before the deadline at the end of the month.

CAD fell against the Euro and Pound, but largely held firm against the ‘Aussie’ and New Zealand Dollars.

There is no Canadian data of note today.

NZD Sheds Some of Last Week’s Gains

Although the New Zealand Dollar stormed higher last week on the back of robust growth data, NZD exchange rates spent Monday sliding.

With all of this week’s biggest New Zealand news (including trade data and the RBNZ rate decision) scheduled for the second half of the week, NZD will remain responsive to general risk appetite.

Data Released

September 25th 09:30 AUD Roy Morgan Consumer Confidence Index  118
September 25th 16:00 EUR German Wholesale Price Index (YoY)  3.5%
September 25th 18:40 GBP BOE's Vlieghe speaks in London 
September 25th 23:00 USD  House Price Index  0.3%

Post by TorFX

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