Australian Dollar Climbs as RBA Indicates Room for Future Tightening

Australian Dollar (AUD) Rises on Hawkish RBA Minutes

Over the course of yesterday’s session, the Australian Dollar (AUD) strengthened following hawkish hints in the Reserve Bank of Australia’s (RBA) meeting minutes.

The minutes showed that the RBA is open to hiking rates in the near future, should the move be necessary. As such, interest rate hike bets mounted, boosting the ‘Aussie’.

Looking ahead, AUD could see volatile trade as we move through today’s session, as markets digest RBA Governor Michele Bullock’s speech.

New Zealand Dollar (NZD) Slides as Inflation Prints Below Forecasts

New Zealand inflation levels for the third quarter came in below forecasts at the start of yesterday’s session, sinking the New Zealand Dollar (NZD).

The reading printed at 1.8%, below the 2% anticipated by markets. Because of this, investors pared back their bets on further tightening from the Reserve Bank of New Zealand (RBNZ).

Due to minimal data releases, the ‘Kiwi’ may see muted trade during today’s session.

Pound (GBP) Tumbles as UK Labour Market Cools

Tuesday saw the Pound (GBP) sink against most major peers, following signs of looseness in the UK labour market.

Wage growth showed signs of cooling in August, printing at 7.8% down from 7.9%. This, in tandem with a fall in vacancies, indicated growing slack in the jobs market, denting Bank of England (BoE) rate hike bets and weighing on Sterling.

This afternoon, September’s consumer price index data is due to release. Both core and headline inflation are expected to cool, which may weaken Sterling further.

Euro (EUR) Supported by Upbeat German Sentiment

The Euro (EUR) was buoyed yesterday by a stronger-than-forecast improvement in the German ZEW economic sentiment index.

While the economic outlook for Germany remained downbeat, pessimism decreased amongst investors. The expectation is that interest rates will stabilise, allowing businesses to gain a foothold.

European Central Bank (ECB) President Lagarde could bring strength to EUR this afternoon, if she takes a hawkish line in her speech.

US Dollar (USD) Firms following Stronger Retail Sales

After a tepid start to Tuesday’s session, the US Dollar (USD) strengthened amid better-than-expected retail sales data.

Printing at 0.7%, the figures indicated robust consumer spending in the US, bolstering USD exchange rates. However, sales growth was down from last month’s 0.8%, limiting the ‘Greenback’.

Turning to today, risk appetite may drive the safe-haven US Dollar as economic releases are in short supply.

Canadian Dollar (CAD) Dampened by Surprise CPI Cooldown

Cooling inflation dented the Canadian Dollar (CAD) yesterday, counteracting an uptick in oil prices.

Due to a lack of new data today, the commodity-sensitive ‘Loonie’ may trade on oil price dynamics.

Data Releases

Oct 18th 08:30? ? ?AUD? ? ?RBA Bullock Speech

Oct 18th 16:00? ? ?GBP? ? ?Inflation Rate (Sep)? ?6.6%

Oct 18th 19:00? ? ?EUR? ? ?ECB President Lagarde Speech

Oct 18th 19:00? ? ?EUR? ? ?Inflation Rate (Sep)? ? ?4.3%