United States Dollar: UK CPI inflation data came and went yesterday and failed to deliver any surprise. Figures showed that annual inflation stood at 3.1% in September, unchanged from August. GBP/USD was steady for most of the day yesterday as a result. US FOMC Minutes were then released in the evening (UK time). These showed that Fed officials believed that the US economy needed extra stimulus and that out of all of the options, buying long-term Treasuries seemed to be the strongest and most viable. Risk sentiment turned mildly positive on the news as stocks trimmed losses on the news. Tim Geithner was also speaking yesterday and helped to calm market nerves too as he said that he saw no risk of a global currency war and expressed how he would like to see the value of the Chinese Yuan rise. GBP/USD has recovered after slipping under 1.5800 yesterday, this after shrugging off very weak UK consumer data earlier this morning. UK unemployment data is due for release this morning.
– We expect a range today in the GBP/USD rate of 1.5800 to 1.5980
Euro: The US dollar is weaker across the board this morning following the FOMC minutes last night. EUR/USD is back above 1.3900 and is now close to making a possible break of the 1.4000 figure again. Risk is back on as European stocks rise this morning; this after the Fed said that they were prepared to buy more government debt last night. In contrast to the US and UK the ECB, or more specifically ECB member Weber, said yesterday that the central bank should stop quantitative easing. Not sure what the likes of Irish, Portuguese and Greek governments will think about this. The recovery in the value of the Euro has meant that GBP/EUR has fallen again and opens this morning at 1.1350.
– We expect a range today in the GBP/EUR rate of 1.1310 to 1.1410
Aussie and Kiwi Dollars: The rebound in equities has certainly supported both the Aussie and Kiwi over the last 24 hours. AUD/USD is back above .9850 and NZD/USD trades close to the .7600 figure at .7580. The Fed minutes have effectively given the green light for markets to keep selling the US dollar and the trend looks likely to continue. Both currencies are stronger against the Pound too and GBP/AUD and GBP/NZD open this morning at 1.6060 and 2.0945 respectively.
– We expect a range today in the GBP/AUD rate of 1.5980 to 1.6140
– We expect a range today in the GBP/NZD rate of 2.0890 to 2.1100
Data Releases:
- AUD: MI Inflation Expectations
- EUR: Industrial Production, French CPI
- GBP: Claimant Count Change, Average Earnings, Unemployment Rate
- NZD: Business Manufacturing Index, Retail Sales
- USD: Import Prices
