Daily Currency Update

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US jobless claims hits pandemic low

CAD - Canadian Dollar

The US dollar was little changed against a basket of major currencies after data showed that weekly jobless claims fell to a fresh pandemic-era low. The US Dollar Index was up 0.07% trading at 93.62 at the time of writing.

US initial jobless claims came in at 290,000 versus an estimate of 300,000, the lowest level since mid-March 2020. This marks a back-to-back week of the number holding below 300,000, so some analysts are looking for stronger jobs growth next month.

The Federal Reserve released its Beige Book yesterday, as investors looked for fresh clues regarding the persistence of input price pressures. Before the Fed goes into the blackout period on October 23, this publication could hint at a reduction of asset purchases as early as November, which in turn could provide a boost to the US Treasury bond yields and the US dollar.

Key Movers

EU annual inflation was confirmed at 3.4% YoY in September, the core annual reading printed at 1.9% which validates the European Central Bank’s wait-and-see stance when it comes to changing monetary policy. EURUSD was down 0.07% trading at 1.6399 at the time of writing.

The UK Consumer Price Index’s 12-month rate came in at 3.1% in September compared to 3.2% recorded in August, missing expectations. Meanwhile, the core inflation gauge retreated to 2.9% from 3.1% in August. GBPUSD reversed its direction from Tuesday’s highs and fell below 1.3800 on Wednesday following the UK’s inflation data. However, it did rebound slightly during the New York hours. The probability of a rate hike before the end of the year stays unchanged, suggesting that the recent decline in GBPUSD is a correction rather than a reversal of direction. GBPUSD was trading around 1.3811 at the time of writing.

Expected Ranges

EUR/USD: 1.1632 - 1.1666 ▼

GBP/USD: 1.3791 - 1.3834 ▼

AUD/USD: 0.7482 - 0.7543 ▼

USD/CAD: 1.2294 - 1.2345 ▲