US Dollar Stumbles as US Payroll Disappoint Again, Euro Tumbles amid European Energy Crisis

Find out how the major currencies have been performing and what movement we could see in the days ahead with our weekly exchange rate update.

 

EUR – Euro Undermined by Europe’s Energy Crisis

The Euro stumbled through the first half of this week, with the single currency being undermined by Europe’s energy crisis, in addition to a weak services PMI reading. The EUR selling bias then remained firmly entrenched through the latter half of the week as Germany’s latest industrial data printed well below expectations.

Turning to next week, the focus for EUR investors in the first half of the session will be on the latest ZEW economic sentiment index, with the Euro likely to face some headwinds if economic morale in the Eurozone dropped again this month.

Top EUR data releases:

Oct 12 EUR ZEW Economic Sentiment (Oct)

Oct 13 EUR Inflation Rate (Sep)

Oct 13 EUR Industrial Production (Aug)

 

USD – US Dollar Dented by Upbeat Mood and Weak Payrolls

The US Dollar initially faltered this week, before quickly finding its feet again as concerns over the US potentially defaulting on its national debt soured market sentiment and bolstered the appeal of the safe-haven ‘Greenback’. However, the US Dollar then slumped again at the end of the week after a weaker than expected US payroll print.

Centre stage next week will be the publication of the US consumer price index. September’s CPI figures are forecast to report US inflation rose back to 5.4%, likely bolstering the US Dollar on the expectation this will reinforce the Federal Reserve’s resolve to start tapering its asset purchases.

Top USD data releases:

Oct 13 USD Inflation Rate (Sep)

Oct 13 USD FOMC Minutes

Oct 15 USD Retail Sales (Sep)

 

GBP – Pound Firms as UK Energy Concerns Ease

The Pound appreciated this week, supported by the apparent easing of the fuel shortage in many parts of the UK and the government’s reassurance that is has enough energy supply for the winter. This upside in Sterling was also supported by the UK’s latest services PMI, after September’s index was unexpectedly revised higher.

Looking ahead, there will be a couple of UK data releases of note next week, with the latest UK jobs report and GDP releases potentially providing fresh trading direction for the Pound.

Top GBP data releases:

Oct 12 GBP Unemployment Rate (Aug)

Oct 12 GBP Wage Growth (Aug)

Oct 13 GBP GDP (Aug)

 

AUD – Australian Dollar Lifted by RBA Optimism, Upbeat Data

The Australian Dollar strengthened this week, with the currency finding support through the first half of the week on the back of some cautious optimism from the Reserve Bank of Australia, in addition to a record trade surplus. After a brief wobble in the mid-week the ‘Aussie’ then resumed its uptrend in response to an improving market risk appetite.

The publication of Australia’s latest jobs report will no doubt be the focus for AUD investors next week. Will a rise in domestic unemployment in September see the Australian Dollar weaken?

Top AUD data releases:

Oct 14 AUD Unemployment Rate (Sep)

 

ZAR – Rand Rocked by Fluctuating Risk Appetite

The South African Rand slumped through the first half of this week’s session as a prevailing risk-off mood sapped demand for the emerging market currency. The Rand subsequently rebounded in the latter half of the session as the market mood improved.

Coming up next week, the publication of South Africa’s latest retail sales figures could place more pressure on the Rand, if sales growth is shown to have contracted again in August.

Top ZAR data releases:

Oct 13 ZAR Retail Sales (Aug)

 

CAD – Buoyant Oil Prices Underpin the Canadian Dollar

The Canadian Dollar trended broadly higher through the first half of this week’s session, with the commodity-linked currency benefiting from stronger oil prices. The second half of the week then saw the publication of Canada’s latest jobs report reinforce this upside, after employment growth beat expectations.

In the absence of any notable CAD data releases, the direction of the Canadian Dollar next week is likely to continue to be driven primarily by oil-price dynamics, potentially extending the upside in the ‘Loonie’ if prices continue to appreciate.