The aussie was the main loser of today’s Asian session, as rising volatility and poor risk sentiment hurt higher-yielding currencies and as a report about consumer sentiment in Australia came in much lower-than-expected.
September’s consumer confidence was down 4.6%, compared to a rise of 3.8% during the previous month. The Australian dollar fell 0.47% to 0.9157, a near six-month low as it broke out of its tight range of the past 2 months. Previously, the aussie had held relatively well versus the strengthening US dollar.
The aussie was also hurt by poor risk sentiment, as a research paper by the San Francisco Fed suggested that interest rates in the United States will have to rise more quickly and further than the market and the public expect. This in turn benefitted the US dollar, but hurt stocks as the S&P 500 retreated further from its near all-time highs.
The euro and the pound managed to hold and stage a slight comeback against the US dollar as the euro rose above the 1.29 mark to 1.2930 and sterling rebounded to 1.6135. 1.2860 and 1.6061 were the previous day’s lows for the euro and sterling respectively. Analysts suggested the two currencies were reacting from oversold conditions and that this move would not change the mind of the market on a stronger US dollar.
Dollar / yen on the other hand climbed above 106.50 to its highest since September 2007. Japanese economic data such as corporate goods prices and machinery orders were mixed.
The data calendar for the remainder of the day will be light. Bank of England Governor Mark Carney will testify today on the August inflation report, while the market’s attention will then shift to the decision of the Reserve Bank of New Zealand as the first item on the agenda on Thursday.