EUR stumbles while USD forges on

GBP pushed on against the euro yesterday, taking things to a three and a half year high against the trouble single currency, as we saw some important data releases from the UK including the fact that inflation remained steady at -0.1% last month. Both the retail and consumer price index were seen to drop in October, too. Retail is now sitting at the lowest level since ’09, and this all plays into the broader view that interest rates might not rise any time soon.

There isn’t much data from the UK today so we’ll look closely at retail sales figures out tomorrow which will give an insight into the spending habits of the UK’s consumer class. This number seems set to take a drop as retail sales are usually quite closely related to economic performance.

It was more bad news for EUR yesterday as the eurozone suffered a bout of poor trading. There is also more and more indication that QE is set to stay for some time to come, as mentioned again by the ECB’s chief economist yesterday. In addition to hitting its worst level against the pound in 3 and something years, the euro also hit its worst level against the dollar since April this year (1.0630 interbank).

With no data out today, its Mario Draghi’s speech on Friday that everyone is waiting for where he may make mention of his intent to extend monetary stimulus even further.

The dollar was looking good yesterday with its gains against the euro at a 7 month high. Yearly inflation was also seen to come in higher at 0.2%, and core consumer prices came in higher at 0.2%.On the flipside, industrial production was seen to fall by 0.2%, more than the 0.1% expected. There will also be Fed meeting minutes out later today which will shed some light on how policy makers are thinking, with possible implications for an interest rate rise next month. We’ll see this release at 19.00 this evening but there will also be a number of Fed members offering up opinions throughout the day.