United States Dollar: Yesterday saw the pound drop against the dollar as the UKs monthly Construction PMI dipped below 60 for the first time since Oct 2013. The release was still upbeat about the sectors prospects saying staffing levels were being increased in response to rising workloads. It also cited a rise in subcontractor wage growth due to a shortage of skilled labour. Although the reading wasn’t quite as high as the stellar readings of the summer it is safely in expansionary territory. GBP/USD had traded as high as 1.5727 at the beginning of the London session however it dipped under 1.57 to find support around 1.5630 in the evening. US Fed Vice-Chairman Stanley Fischer spoke yesterday evening in Washington and said FOMC members may discuss re-wording the next Fed statement, specifically the phrase about keeping rates low for a “considerable time”. If this is omitted from the next statement, due on December 17th, then expect the Dollar to rise as it will signal another small step closer to a rate rise. From the UK today we have the closely followed Services PMI at 9:30am with a slight improvement to 56.6 from last month’s 56.2 expected. George Osborne delivers his Autumn statement at 12:30pm. Across the pond we have the ADP Non-Farms at 1:30pm and the ISM Non-Manufacturing PMI at 3pm. GBP/USD currently sits at 1.5625.
We expect a range today in the GBP/USD rate of 1.5550 to 1.5750
Euro: It’s been a relatively quiet 24 hours from the Eurozone with no top tier data releases of note. EUR/USD has mirrored cables move dropping from around 1.2470 to currently trade at 1.2355. Holders of the shared-currency will be looking to tomorrows ECB press conference for further clues on Mario Draghi and co’s plans to stimulate the economy. Recent comments have indicated that full blown QE is getting nearer and expect further Euro depreciation should further hints be given. GBP/EUR is at 1.2650.
We expect a range today in the GBP/EUR rate of 1.2590 to 1.2745
Aussie and Kiwi Dollars: There was more soft data from Australia yesterday as the Q3 GDP figure printed 0.3%, a fall from Q2s 0.5% and much lower than the 0.7% expected. AUD/USD tested .84 on the release a drop of around 60 pips. The once mighty mining sector contributed only 0.1% to economic growth and the recent falls on commodity prices may hit Q4s numbers. It seems highly unlikely given this release that any rate rise will be happening in 2015 and given the RBAs comments in its recent statement that it would like the exchange rate to be even lower a test of the .80 level may be on the cards if things don’t pick up in the next few months. AUD/USD currently trades at .8405 with the next release of note tonight’s Retail Sales data. GBP/AUD continues to rise and sits at 1.8594. NZD/USD trades at .7770 with GBP/NZD at 2.0115.
We expect a range today in the GBP/AUD rate of 1.8495 to 1.87
We expect a range today in the GBP/NZD rate of 2.0010 to 2.0210
AUD: No data
EUR: No data
GBP: MPC Meeting Minutes
NZD: Credit Card Spending y/y
USD: Core CPI m/m, Retail Sales m/m, Existing Home Sales, Business Inventories m/m, FOMC Meeting Minutes
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