A bit of profit talking in the dollar has allowed the Euro has stage one of its characteristic bounces overnight and this morning with EURUSD recovering to back above 1.2300. Cable has also rebounded a little and is pushing towards 1.5700 meanwhile USDJPY is back below 120.00 at the time of writing. One of the only currencies not to benefit from this little dollar pull back is the Aussie which has come under pressure overnight following poor business confidence data.
The euro remains very much in focus as the initial reaction to last week’s ECB meeting was for the single currency to bounce but it didn’t take long for gains to be reversed as Mario Draghi reiterated that easing will come “early” in 2015. As oil continues to plunge (Brent is down another 60 cents or so this morning) inflation will not be rising anytime soon which puts increased pressure on the ECB with people marking in “early” 2015 to come as soon as January’s meeting.
This morning will see sterling get some attention as UK industrial and manufacturing production is released. A month on month rise of 0.2% and 0.2% respectively is expected, lower than last month’s 0.6% and 0.4%, however the year on year figures are due to rise 1.8% and 3.2% up on 1.5% and 2.9%. This could lend sterling a further helping hand back to recapture 1.5700.