Daily Currency Update
USD - United States DollarMarkets have been quite uneventful in the last 24 hours; we saw data out the U.S. on Wednesday showed Labor Costs for the third quarter increased 3.6 percent beating market expectations of 2.2 percent. Also, the latest on the US-China trade deal was that they were still working together to potentially sign a "phase one" trade deal as early as this month. The U.S. Dollar index has strengthened and currently trades around 97.95. It was an almost tortuously quiet day in the FX markets yesterday, but there was disappointment that the deal between US-China could be pushed back to until December. This drove a number of the major currencies southward, but given how lengthy negotiations have been ongoing, it shouldn't be a surprise another setback has been announced. EUR/USD suffered furthermore with the composite PMI figure for Europe coming in at 50.6, pretty much flat. There's another update for Europe today in the form of the Commission's Autumn Economic forecast, but if it is anything like the recent PMI figures, then the outlook could weigh on the Euro.
Key Movers
The U.K. election campaign has officially begun as Boris Johnson visited Buckingham Place to notify the Queen of the parliament's dissolution ahead of a Conservative Party rally. Financial markets now see opinion polls as the primary barometer to watch in terms of gauging Brexit outcomes which means any significant swings in polls could impact on Sterling. The latest opinion poll shows Boris Johnson's Conservatives in a comfortable 11 point lead on 38 percent ahead of the December 12 general election, labor lagging on 27 percent, the Brexit party seeing their vote shrink to only 10%, while the Liberal Democrats are on 16 percent. GBP/USD sits at 1.2856, having dropped from a high of 1.2897. The main event for the Pound this week was the highly anticipated Bank of England meeting today; interest rates remain unchanged at 0.75%. The BOE will enter a quiet period heading into the December 12th election in the U.K. There is growing speculation that the BOE will begin to adopt this more neutral stance due to weaker growth caused by Brexit.
Expected Ranges
- EUR/USD: 1.1054 - 1.1091 ▼
- GBP/USD: 1.2793 - 1.2878 ▼
- AUD/USD: 0.6861 - 0.6912 ▼
- NZD/USD: 0.6346 - 0.6375 ▼