Major currencies continue to do their best impression of a sideways shuffle, bereft of strong cues.
The USD is off its highs, but not by much. GBP outperformed following a solid labour market report. NZD remains mid-range.
EUR’s tumble through 1.07 on Tuesday has been retraced, and that level now looks to provide support, in the absence of fresh news for the USD rally. The broad Bloomberg Dollar Spot Index is off by 0.4% from the all-time high (the series begins in 2004) it hit earlier in the week.
Sharply lower oil prices are perhaps the most eye-catching feature of an otherwise muted evening. WTI is off by 3%, after industry data showed US inventories grew by 6.3m barrels last week, much more than the weekly EIA report is expected to show. This took WTI below $43 for the first time since late October.
Yesterday’s China data drop had little impact, with markets caught between the better-than-expected retail sales, but worse-than-expected industrial production. The data overall is likely to cement expectations of further monetary stimulus in coming months.
NZD/USD remains stuck within the 0.65 – 0.66 range, and there seems little chance of a break unless one of tonight’s Fed speakers veers off well-worn talking points. At the margin, downward momentum has waned, particularly with NZD/AUD flirting with a break above its 200-day moving average at 0.9290.
With that in mind, today’s AU employment report will be worth watching. Our NAB colleagues are picking an above-market 25k gain in employment.
Later on, ECB President Draghi, and no fewer than five Fed speakers are due to hit the wires. Expect Draghi to remain coy about confirming further QE in December, and the FOMC speakers to tout the prospect of a December tightening. For choice, we’ll be listening most closely to NY Fed President Bill Dudley’s speech, with Q&A expected.
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Raiko Shareef is on the BNZ Research team. All its research is available here.