Inflation numbers out of the UK will need to jump to hit pause on the Pound's demise, while U.S retail sales could influence a resurgent Dollar.
Economic data released through the Asian session this morning was on the lighter side, with key stats limited to August consumer sentiment figures and 2nd quarter wage growth numbers out of Australia.
For the Aussie Dollar,
The Westpac consumer sentiment index fell by 2.3% to 103.6 in August, partially reversing July’s 3.9% rise to 106.1.
The Aussie Dollar moved from $0.72314 to $0.72286 upon release of the figures, which were released ahead of the 2nd quarter wage growth figures.
Wages rose by 0.6% in the 2nd quarter, which was in line with forecasts, while coming in ahead of a 0.5% rise in the 1st quarter.
The Aussie Dollar moved from $0.72294 to $0.72265 upon release of the figures before rising to $0.7234 at the time of writing, down 0.12% for the session.
Elsewhere, the Japanese Yen was down 0.17% to ¥111.34 at the time of writing, with the Kiwi Dollar down 0.12% to $0.6564, the downward slide in the Kiwi resuming.
In the equity markets, it was a mixed start to the day, with the Hang Seng sliding 0.81% and the Nikkei and CSI300 down 0.31% and 0.29% respectively, while the ASX200 recovered from early losses to move into positive territory at the time of writing.
For the EUR, there are no material stats scheduled for release through the morning to provide direction, leaving the EUR in the hands of contagion risks from Turkey and the U.S – China trade war, with Tuesday’s stat out of Germany and the Eurozone having provided limited support on the day.
At the time of writing, the EUR was down 0.03% to $1.1341, with a steadier Turkish Lira having provided little relief to concerns over contagion risk to the Eurozone economy. Direction through the day will continue to be hinged on market sentiment towards the Turkish economy and the ongoing trade spat between the U.S and China.
For the Pound, it’s yet another big day ahead, with key stats scheduled for release out of the UK including July inflation figures.
Following the most recent BoE press conference and general sentiment towards Brexit, a pickup in the annual rate of inflation could reignite talks of another BoE rate hike before the end of the year, though the lack of progress on Brexit may leave any Pound rally on hold near-term as a no deal scenario continues to be a possible outcome.
Tuesday’s softer wage growth figures would have certainly swung the pendulum in favour of the doves.
At the time of writing, the Pound was down 0.06% to $1.2716, with today’s stats and Brexit chatter the key drivers through the day.
Across the Pond, stats are on the heavier side, with key stats through the day including July retail sales and industrial production figures, 2nd quarter nonfarm productivity and unit labour cost numbers and June business inventory numbers.
Of less influence will be the release of August NY Empire State manufacturing numbers, with the Dollar expected to be more susceptible to the downside, the markets ever watchful for any evidence of a slowdown to the U.S economy stemming from the ongoing trade war.
At the time of writing, the Dollar Spot Index was down 0.02% to 96.716, with today’s retail sales figures likely to be the key driver, though the markets will need to keep an eye on the Oval Office, the U.S President more than capable of rocking the boat.
For the Loonie, it’s another quiet day on the data front, with little to provide direction through the day except any updates on the timetable for NAFTA negotiations and possible rhetoric from the Oval Office to get the mood right ahead of meeting at the negotiating table.
At the time of writing, the Loonie down up 0.02% to C$1.3061.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.