FX News

FX update: Risk uncertainty driving moves

Market Overview

Key Points:

• Risk currencies recovered Monday which is a small miracle if we look at how ugly the markets have been of late. The greenback is lower, and equities have started the week well.
• Australian Retail Sales +0.9% vs +0.3% releasing much higher than predicted. This will be adding to the case for an interest rate hike at the RBA’s 7th November meeting.
• Bank of Canada’s Macklem is suggesting the BoC (Bank of Canada) will need to raise policy to restore price stability. It’s reported that the Canadian economy may be headed for a sharp pullback into a recession early next year.
• Crude Oil has fallen over 3.5% in overnight trading to 82.55 as geopolitical fears in Gaza ease. We expect prices to drop in the coming days as OPEC tightens global supply/demand.
• German inflation eased in October contracting 0.3% y/y for the third quarter to 0.0% from 0.3%. This takes the y/y number to 3.8% down from 4.5%
• The Federal Reserve look to be finished with rate hikes saying they expect rates to stay high for an extended period before aggressive hikes kick in, in 2025.
• The Swiss Franc (CHF) has been the strongest currency in the month of October while the New Zealand Dollar (NZD) has largely underperformed and is by far the worst performer.

Previous ArticleNext Article