The battle between risk acceptance and risk aversion continues, with equities, commodities, and global political rhetoric driving currency movements. General risk aversion returned from disappointing U.S. consumer and employment data.

The RBA meets Tuesday, 6 October, and is expected to maintain rates at 3.0%. August retail sales increased 0.9% m/m, with private sector credit rising merely 0.1% m/m, 2.5% y/y. September AiG PMI manufacturing survey improved to 52.0 but September RBA commodity index is down −32.3% y/y. AUD/USD rose to a 2009 high of 0.8858 before falling on risk aversion, breaking and closing beneath its trendline at 0.8634, as shown on the four-hour chart below:

The second reading of U.S. 2Q2009 GDP improved to −0.7% annualised, but September unemployment rose to 9.8% as 263K jobs were cut, hours worked slipped, and average earnings were essentially flat, and therefore September consumer confidence slipped to 53.1. August factory orders fell −0.8% m/m, personal income rose 0.2% m/m, and personal spending increased 1.3% m/m, 0.1% core. September manufacturing PMI also disappointed at 52.6, and initial jobless claims for WE 26 September rose to 551K.

The ECB meets Thursday, 8 October, and is expected to maintain rates at 1.0%. September economic confidence improved to 82.8, business climate to −2.07, and consumer confidence to −19, while September retail PMI printed 48.6 and manufacturing 49.3. The first estimate of September CPI slipped to −0.3% y/y and August unemployment ticked up to 9.6%. EUR/USD slipped to close at 1.4570, remaining within its bullish regression channel.

The BoE also meets Thursday and is not expected to change their QE nor rates, currently at 0.50%, although the second read of 2Q2009 GDP printed slightly higher at 0.6% q/q, −5.5% y/y. September PMIs printed 49.5 manufacturing, 46.7 construction, and 2Q2009 current account widened to a deficit of £11.4Bn. August mortgage approvals held steady, consumer credit fell more than expected, and lending secured on dwellings, September CBI distributive trades, and consumer confidence all improved dramatically. GBP/USD rose then fell to trade roughly flat for the week, closing at 1.5911. EUR/GBP also consolidated, closing at 0.9154.

Canada’s July GDP printed flat. USD/CAD rose and fell with crude oil, closing at 1.0823. AUD/CAD also set a new 2009 high at 0.9521 before sinking to close at 0.9343.

New Zealand printed hopeful surveys, with September business confidence surging to 49.1 from 34.2 previous, and 3Q2009 employment confidence up 6.9 points to 103.0. NZD/USD consolidated above and below the 0.7160 support-resistance level, finally closing at 0.7154. AUD/NZD on four-hour charts bounced from its MA-200 as resistance to also trade flat, closing at 1.2059.

Japan’s August CPI printed −2.2% y/y, −2.4% ex-fresh food, and −0.9% core. 3Q2009 Tankan survey showed a sharply improved outlook, improved indices, and rather lower large all-industry capex. August industrial production rose 1.8%, −18.7% y/y, with housing starts falling −38.3% y/y. August labor cash earnings contracted −3.1% y/y, while retail trades improved 1.0% m/m, −1.8% y/y, the jobless rate to 5.5%, and household spending 2.6% y/y. JPY continued its volatility from last week with violent swings. USD/JPY could not hold gains above 90.00 and closed at 89.74. EUR/JPY swung about support-resistance at 130.60, closing at 130.75, and AUD/JPY respected 79.60, falling to close at 77.47.