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USD eases further

Daily Currency Update

Monday had very little macroeconomic data to comment on, with one exception being Federal Reserve Vice Chair Lael Brainard speaking about the economic outlook at a Bloomberg News event, in Washington, DC. Brainard indicated that the central bank could soon slow the pace of its interest rate increases, which has led markets to expect a step-down in December from the Fed’s rapid pace of rate increases this year. Data early this morning has shown the UK unemployment rate edged higher to 3.6% in September, while average earnings rose 5.7% on the month, climbing at the fastest pace in more than 20 years. GBP/USD sits back above 1.1800 this morning, making a push for 1.1850 at the time of writing. The GBP recent rally against the USD will have certainly been aided by the comments of Brainard, but also on news of lowering tensions between the US and China at the G20 meeting. The USD is normally sold off as a safe haven currency when markets are calmer.

Key Movers

Europe this morning has seen positive inflation data come out of Spain. Consumer prices rose 7.3% year-on-year in October, down from 8.9% in the period through September. French CPI rose 6.2% on the year in October, substantially below the 7.1% expected, even though it still represents a rise from 5.6% the prior month. Unemployment in the European region eased back to its lowest in 14 years in the third quarter. The data doesn’t stop there for today, as we anticipate third-quarter unemployment and growth data from the Eurozone. The widely-watched German ZEW economic sentiment is also due for release. This could lead to a volatile date for the EUR, but GBP/EUR currently sits at 1.1375 and EUR/USD 1.0430.

Expected Ranges

  • GBP/USD: 1.1760 - 1.1880 ▲
  • GBP/EUR: 1.1310 - 1.1480 ▲
  • GBP/AUD: 1.7410 - 1.7690 ▼
  • EUR/USD: 1.0320 - 1.0570 ▲