The Australian dollar is the biggest gainer this morning coming out of Labor Day weekend, with the currency being fueled by a smaller-than-expected national current account deficit and the Reserve Bank of Australia’s decision to hold interest rates steady. While the RBA did not give any indication of what it would do with interest rates in the future, some analysts expect a cut this year to devalue the currency as the Aussie dollar’s recent strength has caused exports to lag. Nonetheless, the Aussie dollar is up for a fifth-straight day, marking its longest rally against the US dollar since March.
The pound is climbing on stronger-than-expected service sector activity growth in August, which comes on the heels of last Thursday’s data showing the UK’s manufacturing output in August smashed expectations. Investors are beginning to warm on the pound as the risk of a recession in the short term seems to have subsided with the positive data coming out in recent weeks.
The euro is trading higher against a weaker US dollar, with the Eurozone’s GDP growing as fast as analysts had anticipated during the second quarter. Yesterday’s Eurozone retail sales growth crushed expectations for July while service sector data for August showed better-than-expected activity growth out of Spain, Italy, and France, which also may be giving the euro a lift this morning.
The US dollar is trending lower with this morning’s surprisingly poor non-manufacturing output report, and with last Friday’s disappointing August jobs report still stinging. The Canadian dollar is trading higher against the greenback as well, despite oil prices dipping below $45 per barrel.
EURUSD: The euro is trading higher against a weaker dollar.
GBPUSD: The pound is climbing on August’s stronger-than-expected service sector activity growth.
AUDUSD: The Aussie dollar is rising on narrowing deficits and with the RBA’s decision to hold interest rates steady.
USDCAD: The Canadian dollar is up against a weakening greenback even as oil prices dip slightly.