We saw a bit of consolidation across the currencies in yesterday’s trading, most of the majors came back better bid against the dollar during the course of the day especially once the New York session kicked in and news that the government shut down is still a possibility came through to the markets. Stock markets finished the day on the back foot with the Dow off nearly 0.4%.
The main fundamental excitement came early in the day yesterday as the Australian employment data was released, we saw sharp moves in the Aussie as a quick move to the topside on the better than expected headline number was heavily sold into on the increase in the unemployment rate to take it back down to the 0.7950 area. The Aussie has now managed to regain the 0.80 handle comfortably, but this is more on the back of negative US dollar sentiment. As was widely expected in the market, the Chinese GDP numbers came out slightly better than expected and the market reaction was pretty limited as this result just added further fuel to the scepticism fire that we’re not getting full transparency from the Chinese NBS on data.
US data in the form of the Building Permits and Philly Fed numbers failed to move the market as they came out close to expectation and the main mover was the news on the possible US government shut down.
Looking ahead to today and it’s very quiet on the economic data release front, we’ve already had a lower print our of NZ on their Business Manufacturing Index but it resulted in only a slight dip in the flightless bird. The main release for traders to focus on today will be the UK Retail Sales numbers with market expectation sitting at -0.8%. The news wires will remain the main source of fresh moves as we move through the sessions today, but it does have a very ‘Friday’ feel to it today and we expect that most of the currencies will remain in recent ranges.
Subscribe to RSA's FX Insight and get access to our daily market commentary.
If you have any questions or queries, please contact the team at info@sec.rakuten.com.au or visit our website.