The dollar had another strong performance overnight, outperforming all G10 currencies. This time, the boost came from Chair Powell’s comments suggesting the Fed may take its time easing policy. Data released yesterday showed producer prices exceeded consensus, while jobless claims were below expectations, reaching their lowest level since May—encouraging a more cautious approach to further rate cuts.
Overnight, China’s economy showed encouraging signs. Retail sales grew at their strongest pace in eight months, indicating that Beijing’s latest round of stimulus has boosted key sectors. Retail sales increased by 4.8% in October, up from September’s gain of 3.2%, exceeding even the most bullish estimates. Combined with industrial output rising by 5.3%, these figures hint at shoots of positivity.
Domestically, UK GDP expanded by just 0.1% quarter-on-quarter in Q3, falling short of the 0.2% estimate and following a 0.5% expansion in Q2. Cable sits below the 200-day moving average at 1.2820 and, in my view, remains a sell on rallies.
In other markets, Bitcoin fell 0.6% to $87,710.2, Ether dropped 2.3% to $3,048.39, the yield on 10-year Treasuries is at 4.45%, West Texas Intermediate crude fell 1.2% to $67.90 a barrel, and spot gold edged down 0.1% to $2,561.55 an ounce.
As for the day ahead, US Retail Sales data is out at 13:30, with the market likely to remain data-driven today.
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