It has been a choppy session for the dollar following Wednesday’s US data, but it has clawed back its early losses after initially dipping to one month lows against various currencies following a surprise rise in retail sales, as well as an uptick in underlying inflation, cementing expectations for an interest rate hike in December. US headline CPI rose 0.1% mm, 2.0% yy in October, slowing from 0.5% mm, 2.2% yy but meeting expectation. Core CPI rose 0.2% mm & 1.8% yy, up from September’s 0.1% mm 1.7% yy. The annual reading also beat expectation at 1.7% yy. Headline retail sales rose 0.2% in October, above expectation of 0.0%. In other markets, US stocks headed lower, which in turn ensured demand for the safe-haven Yen, as a drop in oil prices for the fourth consecutive day pulled down energy stocks amid worries over delay in corporate tax cut. Metals were choppy but without any real direction.
Thursday will be busy once again, starting with the Australian unemployment figure (exp 5.6%, +17.5k, PR 65.2%) although there will be little else from Asia. The UK Retail Sales (exp -0.0%mm, -0.8%yy ) and the EU CPI (exp 0.15mm, 1.4%qq) will be the focus in Europe, while the US will look to the weekly jobless claims, the October Capacity Utilisation, NAHB Index and the import/export index for guidance. There are also going to be plenty of central bank speakers through the US session so watch for headlines coming from them. Speakers will include the BOE’s Carney/Cunliffe/Broadbent, the Fed’s Mester, Brainard, Kaplan and Williams and the ECB’s Constancio
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