Back
1 Nov 2013
Morning outlook: Eurozone inflation hangover
FXstreet.com (London) - The euro was the biggest mover of the day yesterday, as lower-than-expected Eurozone inflation numbers and rising joblessness raised expectations of a further ECB rate hike.
September inflation slowed to 0.7 percent year-on-year, the lowest rate since November 2009, undercutting analyst expectations of a hold of August’s 1.1 percent rate.
The jobless rate climbed to a record 12.2 percent.
The rising possibility of a further rate hike when the ECB meets in December helped to push the euro down. EUR/USD fell from USD1.3700 to a low of USD1.3575.
Dollar struggled to find any significant direction. It found short-term support on the higher-than-expected Chicago PMI numbers (from 55.7 to 65.9 in October, its highest reading since early 2011), but traded flat against the yen and weakened against sterling.
AUD made some gains on increased risk appetite. AUD/USD climbed 0.37 percent to USD0.9484, while NZD/USD climber 0.24 percent to USD0.8274.
Today we are expecting to see a decline in US manufacturing ISM, ending four months of sustained growth. Consensus expectation is for a decline to54.0 from last month’s 56.2 print.
UK manufacturing PMI is also expected to see a small slip from 56.7 to 56.4. Today’s RBS earnings results may also have the potential to have a very short-term effect on GDP as an indicator of the overall health of the UK banking sector.
September inflation slowed to 0.7 percent year-on-year, the lowest rate since November 2009, undercutting analyst expectations of a hold of August’s 1.1 percent rate.
The jobless rate climbed to a record 12.2 percent.
The rising possibility of a further rate hike when the ECB meets in December helped to push the euro down. EUR/USD fell from USD1.3700 to a low of USD1.3575.
Dollar struggled to find any significant direction. It found short-term support on the higher-than-expected Chicago PMI numbers (from 55.7 to 65.9 in October, its highest reading since early 2011), but traded flat against the yen and weakened against sterling.
AUD made some gains on increased risk appetite. AUD/USD climbed 0.37 percent to USD0.9484, while NZD/USD climber 0.24 percent to USD0.8274.
Today we are expecting to see a decline in US manufacturing ISM, ending four months of sustained growth. Consensus expectation is for a decline to54.0 from last month’s 56.2 print.
UK manufacturing PMI is also expected to see a small slip from 56.7 to 56.4. Today’s RBS earnings results may also have the potential to have a very short-term effect on GDP as an indicator of the overall health of the UK banking sector.