Pound Sterling (GBP)
As with Monday, the Pound has ticked up against the Euro and US Dollar today mainly because there is little interest in the Euro at present.
UK news has brought the announcement that Theresa May will be meeting with Donald Tusk, President of the European Council.
The meeting is expected to see May fill Tusk in on her Brexit plans, which could be the first real step in restarting currently stalled talks. The PM’s previous comments in Florence had a mixed reception and failed to trigger a lasting GBP advance.
The Pound could be influenced by Confederation of British Industry trade figures on Wednesday. If these show an improvement as some expect then the Pound could rise in value.
Proving that the German election result was a significant shock to the system, the Euro has remained down against the Pound and US Dollar today.
The single currency has been devalued by the struggle that Germany now faces, as the CDU/CSU group must form a functional coalition with wildly differing lesser parties.
With some analysts estimating that coalition talks won’t conclude until December, Germany may remain a limiting factor on the Euro for the months ahead.
The Euro could be influenced by this afternoon’s speech from Peter Praet, a European Central Bank (ECB) official.
US Dollar (USD)
A pair of dovish Federal Reserve speeches have unsettled US Dollar traders today, leading to a loss against the Pound but moderate gains elsewhere.
On Monday, Fed officials Charles Evans and Neel Kashkari downplayed the likelihood of a near-term US interest rate hike.
Kashkari justified this outlook by stating that inflation was unlikely to pick up in the near-term, while Evans voiced concern about the slow pace of wage growth.
The USD could be further influenced by Fed speeches later today, when officials Loretta Mester, Raphael Bostic and Chair Janet Yellen all give remarks.
If these officials voice support for higher interest rates in the future, the US Dollar could make an all-around advance.
Australian Dollar (AUD)
Although the US Dollar has recently taken a knock from Fed speeches, it has still been strong enough to drive down the Australian Dollar’s appeal.
The only real AUD gains have been against the Euro and New Zealand Dollar, both of which have been held back by worrying election results.
The Australian Dollar has a chance of rebounding against peers on Thursday, when Reserve Bank of Australia (RBA) official Guy Debelle gives a speech.
New Zealand Dollar (NZD)
Struggling for the second day in a row, the New Zealand Dollar has opened trading with major losses against all regular peers today.
Along with post-election uncertainties weakening the NZD, the currency has also been devalued by a larger-than-expected trade deficit posting for August.
The July surplus had been expected to decline anyway, but the drop from 98m to -1235m was even worse than estimates.
The next major NZ news will be the Reserve Bank of New Zealand (RBNZ) interest rate decision on Wednesday.
RBNZ policymakers are not expected to change interest rates, but could still trigger an NZD recovery by backing higher rates in the future.
Canadian Dollar (CAD)
As commodities traders speculate about a sudden surge in crude oil prices, the Canadian Dollar has appreciated against the Euro and New Zealand Dollar. Elsewhere, however, the CAD has slipped against the Pound and US Dollar.
The main oil news of late is that Turkey has threatened to shut down a pipeline carrying oil into northern Iraq. This is in response to an independence referendum in the Iraqi region of Kurdistan which has raised concerns among the region’s neighbours.
The main CA event this week remains a speech from Bank of Canada (BOC) Governor Stephen Poloz, which is due on Wednesday afternoon.
If Poloz strongly hints at higher Canadian interest rates in the future then the Canadian Dollar could make overall gains against peers.