Forex Market Recap (24-29 October 2021)

The AUD took the top stop this week due to high inflation updates and rate hike speculation, while traders looked bearish on the EUR all week, due to low expectations of a rate hike and weak economic updates.

USD:

• New home sales hit six-month high as the median price stays above $400K
• Advance GDP for Q3 2021 2.0% vs 2.8% forecast
• Weekly jobless claims fell to 281K vs 289K forecast
• Core PCE price index increased 3.6% for a fourth straight month

EUR:

• Spain’s central bank chief Pablo Hernandez de Cos said that high inflation may persist
• German industrial exports hurt by raw material supply problems
• German unemployment fell by 39K in seasonally-adjusted terms to 2.46M in October
• Germany preliminary GDP in Q3 2021 up 1.8% on the previous quarter
• France preliminary GDP in Q3 2021 up 3.0%
• France CPI +2.6% in October

GBP:

• BoE's Tenreyro says needs time to think about rate hike
• Serious covid cases hit levels last seen in March
• UK Chancellor delivers $103B of stimulus to boost economy
• UK slams France’s Brexit threats over fishing as tensions rise
• Mortgage approvals hit 14-month low as tax break ends; 72,645 in September from 74,214 previous

CAD:

• BoC accelerates potential timing of rate hikes; ends bond buying program on Wednesday
• Canada Industrial Product Price Index +1.0% m/m in Sept; Raw materials: +2.5% m/m in Sept.

JPY:

• BoJ holds monetary policy & sees inflation below 2% target for at least two years
• BoJ says it will not be influenced by the actions of moves by other central banks
• Jobless rate unchanged at 2.8% in Sept
• Consumer confidence falls to 39.2 vs. 37.8 previous

AUD:

• CPI rises 0.8% q/q, 3.0% y/y; core inflation rises by 2.1% vs. 1.8% forecast
• Export prices climb 6.2% q/q, slowing from 13.2% in Q2
• Import prices rose 5.4% vs. 1.9% previous
• PPI expands 1.1% in Q3
• Retail sales climb 1.3% in September as economy reopens

NZD:

• Imports rise to $6.6B in September vs. $4.4B in exports; third consecutive record month for imports
• Business confidence falls in October as 13.4% of survey respondents expected economy to weaken.
• Consumer confidence falls 7 points to 98 as Covid-19 restrictions continue
• RBNZ Governor Adrian Orr shows tightening bias with call on financial institutions to use their balance sheets to support economic recovery