United States Dollar:
The pound got a boost yesterday morning as UK retail sales for October beat forecasts, showing 0.8% growth m/m. After last month’s disappointing result a rebound was expected, however the better than expected print saw cable regain 1.57 to reach 1.5733 by lunchtime. The report showed the mild weather had kept clothing sales subdued but this sector should benefit from the recent colder conditions as people head to the shops for winter. The afternoon saw mixed data from the States, with CPI coming in flat against an expected fall; the core reading printed 0.2% growth. Later in the day, unemployment claims slightly undershot forecast at 291k, yet the markets would have been encouraged by a much better than expected Philly Fed reading. The index printed 40.8 when 18.9 was forecast, a big jump from last month’s 20.7 and the highest reading since 1993. Holders of the greenback will be hoping the cold weather the US is experiencing isn’t as severe as the polar vortex that so badly affected Q1s GDP reading. Cable currently sits at 1.5682, with UK public sector net borrowing, the only notable release from the UK or US, is due this morning.
Euro:
There was yet more underwhelming data from the eurozone with the latest batch of PMIs showing far from impressive numbers. Both French services and manufacturing were again under 50. Manufacturing has only been above the 50 reading, which shows expansion, twice this year! The closely followed German manufacturing reading came in flat at 50, with last month’s reading revised down to 51.4. The German services reading printed 52.1 missing the 54.5 expected. There is no top tier data releases from the eurozone today, so holders of the shared currency will already be looking forward to next Friday’ Flash CPI reading hoping for an increase from the current 0.4%. EUR/USD and GBP/EUR are both currently at 1.2515.
Aussie and Kiwi Dollars:
There has been no data of note from either Australia or New Zealand in the past 24 hours and next week also looks relatively quiet. The pair will likely react to data from further afield with next Tuesday’s US Q3 GDP reading probably the biggest release on the horizon. GBP/AUD is at 1.8166 and GBP/NZD at 1.9915 after briefly touching 2 yesterday.
Date Releases for the next 24 hours:
AUD: No data
EUR: No data
GBP: Public Sector Net Borrowing; MPC Member Miles Speaks
NZD: No data
USD: No data
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