Pound limps along ahead of UK and US central bank minutes

United States Dollar:

The pound remains under pressure this morning, despite yesterday’s stronger-than-expected inflation data release. Year-on-year inflation accelerated last month by 1.3% against forecasts for 1.2%. GBP/USD continued to trade close to the 1.5650 level following the news, spiking to a high of 1.5678 following the release of US economic data in the afternoon. US producer prices came in above expectations at 0.2%, and NAHB housing data printed a bit stronger than expected, but then, as the news filtered through, the dollar gained ground and GBP/USD eventually fell to a low of 1.5603 in Asia. It’s close to this level this morning at 1.5616. Bank of England minutes are due today. Markets will be eyeing this closely to see if the two members who voted for a rate hike last time around have become any less hawkish, especially given the dovish Inflation Report released last week. Later on this evening, attention will turn to the U.S. and the FOMC minutes, and markets will be looking for any change in language or, moreover, to see whether they leave out the words ‘considerable time’ when referring to the period before the Fed raises rates.

Euro:

EUR/USD has been reasonably steady during the last 24 hours, however it did react positively to better-than-expected German ZEW data yesterday morning. The investor confidence index rose for the first time in almost a year, jumping to 11.5 in November from a previous reading of -3.6. EUR/USD rose from 1.2487 to 1.2538, and went to trade to a high of 1.2545 on Tuesday. It’s held firm ever since, and opens this morning at 1.2545. It has continued to push higher vs. the pound over the last 24 hours – EUR/GBP opens in London at .8030. There isn’t much by way of top-tier economic data due from Europe today, and we may be in for a period of steady ranges in the run up to this evening’s FOMC minutes.

Aussie and Kiwi Dollars:

NZD was sold off yesterday and overnight following a disappointing dairy auction – the Global Dairy Trade auction showed that the index fell by 3.1%. With New Zealand being the largest exporter of milk powder in the world, the news naturally had a negative impact on the bird and it has fallen from .7975 to .7860 over the last 24 hours. The Aussie dollar also traded lower, as commodity prices continued to soften – AUD/USD has fallen from .8745 to .8650 in the last day.

Data releases for the next 24 hours:

AUD: No data

EUR: Current Account

GBP: MPC Official Bank Rate Votes

NZD: PPI Input q/q, PPI Output q/q

USD: Building Permits, Housing Starts, Crude Oil Inventories, FOMC Meeting Minutes