Dollar Could Come Under Pressure Due To This Weeks Scheduled Releases

The main FX pairs spent most of the week confined to narrow ranges. Some residual impact from the previous Friday’s weak US labour market data did act as a slight drag on the dollar. As the week came to an end, EUR/USD had regained a solid footing above $1.13, while cable (GBP/USD) traded above $1.53. EUR/GBP continued to flirt with the upside of the 74p level.

In the week ahead, there is a busy schedule in the US. Retail sales (September) are expected to confirm further strong growth in spending in Q3, while industrial output (September) could indicate that the sector returned to growth in Q3 after declining in H1. However, it may not all be positive news for the dollar, with CPI inflation anticipated to fall back into negative territory in September.

The outlook is also mixed in the UK. Growth in earnings is forecast to pick-up further in August, which could help to support the UK’s consumer led growth. Although, the decline in the unemployment rate and growth in employment appear to have stalled. Meantime, CPI inflation is also forecast to turn negative again. Thus sterling could struggle for upward momentum.

The Eurozone schedule is light, with industrial production for August the main release. Thus, any moves in EUR/USD or EUR/ GBP could come from the non-euro side of the pairs this week.

Stanley Fischer believes that economy may warrant lift-off this year

While Fischer stated that the economy may be strong, the Fed is watching slower jobs growth as a large proportion of new jobs are only part-time and the effect of the global economy. Read more

Europe shielded by ECB printing press

Mario Draghi, ECB president last week in Lima for the annual IMF meeting stated that he can use the instruments at his disposal until the ECB’s reaches the outlined mission of European wide inflation of 2%. Currently the ECB is spending €60 billion a month. The emphasis of being able to do whatever it takes could mean extend the ECB’s programme into 2017. Read more

Over reliance on the Housing market?

Australia has enjoyed economic growth for the past 25 years, however in the past few years the economy has become reliant on the housing industry to support growth. As a result this has seen the housing industry become over enthusiastic as analyst now worry that an oversupply exists for the current rate of economic and population growth.

Additionally people budgets are stretched to the max, as total household debt stands at 133.6% of Australia’s GDP. Read more

UK private sector pay rising at fastest rate in fourteen years

According to a leading thinktank, private sector pay is rising for the highly skilled middle aged segment of the population as a greater emphasis is placed on experience and qualifications. Read more

Aussie dollar

The Australian dollar edged up 0.1 percent to $0.7341 AUD=D3, staying firm after surging 4 percent last week for its biggest weekly gain since late 2011. On Monday, it hit a fresh seven-week high at $0.7347.

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