Packed data diary keeps US traders edgy

Yesterday’s release of US retail sales and producer prices delivered marginal improvements in a number of areas. That was enough to pull some US dollar buyers into the market but not enough to see any substantial rally. The GBP/USD rate starts today slightly lower at $1.2380 ahead of a stacked US data diary this afternoon. The EUR/USD rate is a little lower as well but only half a cent down at $1.0842. The afternoon’s data will include the weekly jobless claims numbers industrial production figures long-term treasury purchases and import & export prices. One of the key elements of this data is the weekly jobless claims. The markets are expecting a slight uptick in the numbers of fresh unemployment welfare claims, which, when measured against the soft inflation data released earlier in the week, would add to the calls for the Federal Reserve to soften its stance on interest rates. The term, ‘soft landing’ is bandied around a lot but it is slightly misplaced, in as much as the US economy wasn’t overheating in anything other than supplier-driven inflation.

AUD volatile as mixed employment data assessed

Although the Australian economy added 55,000 jobs in October, the unemployment rate still rose by a small margin to 3.7%. The markets are clearly concerned that the data is rather mixed and of the number of jobs created, only 17,000 were full-time. Arguably, this ought to be enough to keep Australian interest rates on hold for an extended period And the Reserve Bank of Australia will face pressure to start easing the cost of borrowing. The slightly confusing nature of the data caused a degree of volatility for the Australian dollar overnight. The GBP/AUD rate bounced from AUD 1.9050 to 1.9170 and it has fallen back to AUD 1.9100 this morning. That is the last of the Australian data for the week. So a couple of days of consolidation is the most likely outcome.