Euro Trading At Lowest Level Since April
The action on currency markets remained within relatively tight ranges. Of the moves that did occur, some mild Pound Sterling strength is evident over the last 24 hours. This was reflected in modest upward moves in Pound Sterling against the Dollar and the Euro.
GBP/USD managed to edge higher within the $1.51-1.52 range. EUR/GBP experienced some downward momentum, unable to hold 71p. Elsewhere, EUR/USD tested below $1.07, trading at its lowest level since April, before recovering overnight and opens this morning very close to where it started yesterday.
Looking ahead to today, the US agenda is very light with no releases of note to interest dollar watchers. It is a similar story in the Eurozone on the data front. However, a speech by ECB President Mario Draghi will warrant attention. Draghi is likely to once again emphasise the easing bias that exists within the ECB which, in turn, could keep the euro on the back foot today.
Meanwhile, on the sterling side, today sees a raft of UK labour market data for the September/October period. This data provides some two-way risk for the currency. A better than expected batch could induce some further upside to sterling. However, any downside surprises could weigh on the currency following on from last week’s dovish BoE policy statements. A speech by BoE Governor, Mark Carney, also provides some event risk for the currency.
Portuguese politics and ECB policy cause Euro to stumbles
For the first time since 1974, Portugal has ousted its government. The new government will have a centre left political view. As a result the Euro fell to below $1.07 for the first time in six months.
Additionally today Mario Draghi has a speech which is expected to hint further at an extended quantitative easing program. Read more
UK Unemployment and earnings
U.K. unemployment fell to the lowest in more than seven years in the third quarter and the number in work rose to a record. The rate fell to 5.3 percent, the lowest since the spring of 2008, the Office for National Statistics said Wednesday in London.
Earnings excluding bonuses rose an annual 2.5 percent in the quarter, down from 2.8 percent in the previous three months and missing forecasts for a reading of 2.6 percent. Total pay growth held at 3 percent, thanks to a 15 percent surge in bonuses.
Australians rallied by Turnball according to forecast indexes
Consumer sentiment has hit a two year high, reaching 101.7. When the index is above the 100 mark, optimist out number pessimists. This kind of reading has only occurred three times in the past twenty months.
The index tracking economic expectations for the next twelve months rose by 5.8 percent. This aligns with the index which tracks expectations for five years in advance which soared 24.2 percent.
The positive reading for indexes poses an interest time for the Australian central bank as it may move to reduce interest rate within the next three to six months. However this could over inflate the economy especially as a bubble is forming in the property market. Read more about the forecast here
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