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11 Dec 2014
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US Retail Sales beat forecast

United States Dollar: With no top tier data from the UK yesterday, the pound reacted to events further afield. From the States there was yet more good news with Retail Sales showing better than expected figures. Both the core (0.5% m/m) and overall (0.7% m/m) reading printed higher than forecast. Last month’s readings were revised upwards too and combined with a slower than expected fall in input prices it was another good day for the Greenback. Bank of England Governor, Mark Carney, spoke yesterday and announced changes to the way the MPC works. Pencilled in to start in 2016 was a reduction in MPC meetings per year from 12 to eight, similar to the way the Fed works. In another change, minutes from meetings would be made public at the same time as the policy decisions are announced instead of being released a couple of weeks later. GBP/USD currently trades at 1.5715. This morning sees Construction Output figures from the UK with a 0.8% m/m rise expected. This afternoon we have PPI and Consumer Sentiment releases from the States.

We expect a range today in the GBP/USD rate of 1.5660 to 1.5755

Euro: German ZEW (an investor confidence index) printed in line with expectations on Tuesday and showed that confidence increased for a fourth month in a row in November – it rose to 54.6 from 52.8 in October. Euro zone ZEW Sentiment printed below market expectations at 60.2 vs. 63.1. Meanwhile yesterday, the OECD lowered its forecasts for global GDP and called on the ECB to begin quantitative easing in order to steer the economy away from deflation. This pressured the single currency lower yesterday morning and EUR/USD fell to 1.3490. It has recovered overnight following Bernanke’s dovish comments, trading to a high of 1.3572 in Asia. EUR/USD has settled back to open this morning at 1.3530 ahead of FOMC meeting minutes and important US data releases this afternoon. It has also lost some ground this morning after German PPI printed softer than expected at -0.2%. After dropping below 1.19 overnight GBP/EUR has recovered to trade at 1.1925 currently.

We expect a range today in the GBP/EUR rate of 1.2570 to 1.27

Aussie and Kiwi Dollars: AUD/USD has remained range-bound throughout most of the last 24 hours trading between .8240 and .8290. With US data improving and Chinese softening the Aussie looks likely to push below .80 in the coming months. It may find some support however should the Chinese government decide further stimulus is needed to keep its GDP figures above 7% for 2015. Monday sees the Australian Governments Mid-Year Economic and Fiscal Outlook release with the latest RBA Monetary Policy Meeting Minutes the day after. GBP/AUD is at 1.8970. Overnight saw a slip in the NZ Manufacturing Index from 58.9 to 55.2. NZD/USD ends the week higher after the unexpectedly hawkish comments from the RBNZ mid-week; it currently sits at .7817. GBP/NZD trades at 2.0090..

We expect a range today in the GBP/AUD rate of 1.8940 to 1.9070

We expect a range today in the GBP/NZD rate of 2.00 to 2.0150

Data Releases

AUD: No data

EUR: Industrial Production m/m

GBP: Construction Output m/m

NZD: No data

USD: PPI m/m; Prelim UoM Consumer Sentiment

If you want instant updates on movements in the FX market and fast access to the UKForex daily commentary, follow us on twitter at http://twitter.com/ukforex or @ukforex

11 Dec 2014
Share

US Retail Sales beat forecast

United States Dollar: With no top tier data from the UK yesterday, the pound reacted to events further afield. From the States there was yet more good news with Retail Sales showing better than expected figures. Both the core (0.5% m/m) and overall (0.7% m/m) reading printed higher than forecast. Last month’s readings were revised upwards too and combined with a slower than expected fall in input prices it was another good day for the Greenback. Bank of England Governor, Mark Carney, spoke yesterday and announced changes to the way the MPC works. Pencilled in to start in 2016 was a reduction in MPC meetings per year from 12 to eight, similar to the way the Fed works. In another change, minutes from meetings would be made public at the same time as the policy decisions are announced instead of being released a couple of weeks later. GBP/USD currently trades at 1.5715. This morning sees Construction Output figures from the UK with a 0.8% m/m rise expected. This afternoon we have PPI and Consumer Sentiment releases from the States.

We expect a range today in the GBP/USD rate of 1.5660 to 1.5755

Euro: German ZEW (an investor confidence index) printed in line with expectations on Tuesday and showed that confidence increased for a fourth month in a row in November – it rose to 54.6 from 52.8 in October. Euro zone ZEW Sentiment printed below market expectations at 60.2 vs. 63.1. Meanwhile yesterday, the OECD lowered its forecasts for global GDP and called on the ECB to begin quantitative easing in order to steer the economy away from deflation. This pressured the single currency lower yesterday morning and EUR/USD fell to 1.3490. It has recovered overnight following Bernanke’s dovish comments, trading to a high of 1.3572 in Asia. EUR/USD has settled back to open this morning at 1.3530 ahead of FOMC meeting minutes and important US data releases this afternoon. It has also lost some ground this morning after German PPI printed softer than expected at -0.2%. After dropping below 1.19 overnight GBP/EUR has recovered to trade at 1.1925 currently.

We expect a range today in the GBP/EUR rate of 1.2570 to 1.27

Aussie and Kiwi Dollars: AUD/USD has remained range-bound throughout most of the last 24 hours trading between .8240 and .8290. With US data improving and Chinese softening the Aussie looks likely to push below .80 in the coming months. It may find some support however should the Chinese government decide further stimulus is needed to keep its GDP figures above 7% for 2015. Monday sees the Australian Governments Mid-Year Economic and Fiscal Outlook release with the latest RBA Monetary Policy Meeting Minutes the day after. GBP/AUD is at 1.8970. Overnight saw a slip in the NZ Manufacturing Index from 58.9 to 55.2. NZD/USD ends the week higher after the unexpectedly hawkish comments from the RBNZ mid-week; it currently sits at .7817. GBP/NZD trades at 2.0090..

We expect a range today in the GBP/AUD rate of 1.8940 to 1.9070

We expect a range today in the GBP/NZD rate of 2.00 to 2.0150

Data Releases

AUD: No data

EUR: Industrial Production m/m

GBP: Construction Output m/m

NZD: No data

USD: PPI m/m; Prelim UoM Consumer Sentiment

If you want instant updates on movements in the FX market and fast access to the UKForex daily commentary, follow us on twitter at http://twitter.com/ukforex or @ukforex