USD strength is here to stay?

Daily Update

Yesterday’s Markets

• AUD RBA's meeting minutes
• EUR Gross Domestic Product report from Germany
• EUR Gross Domestic product report from Europe Zone Q3
• USD Retail sales, retail sales control group & Retail sales Ex- Auto
• GBP Core consumer price index & consumer price index

Yesterday Explained

The RBA left the cash rate unchanged at 1.5% earlier this month after cutting for the first time since May in August by 25bp's to record lows. However, new RBA Governor Lowe started this year on a positive outlook and instilled confidence in markets that the Australian economy is still on track. 

After a strong first half of the year, the German economy posted the expected next stage of a gradual growth slowdown in the third quarter. Brexit meets solid domestic economy. This is probably the best description of the German economic performance during the third quarter. Even though households and companies probably didn’t feel it, monthly hard economic data had suggested a real roller-coaster ride of the economy, with permanent ups and downs. Today’s GDP growth puts a conciliatory end to an exciting quarter.

Gross domestic product and Trade balance report from Europe was released yesterday and has shown a decent growth, this made the euro boost a little upward. Nevertheless following this report, US released retail sales, retails sales control group and retail sales ex-autos. all the reports showed a consistent growth which helped the USD to strengthen .The UK consumer prices failed to keep up its upward march and dropped sharply in October, coming in at 0.9% versus September’s +1.0% and missed estimates of a 1.1% reading. While the core inflation gauge also dropped in Oct to +1.2 y/y versus 1.5% last. Markets had predicted the core figures to show an increase of +1.4%. 

Today’s Markets

• NZD Retail sales and retail sales ex-autos Q3
• USD Crude Oil Stock's change
• USD NAHB Housing market index report
• USD Industrial production & Capacity utilization (Oct)

Today’s Focus

New Zealand will release retail sales and retail sales ex-autos which measures the total receipts of retail stores and the total receipts of retail stores except automobile sector. Today is mainly packed with US reports. Energy Information Administration (EIA) will release Crude oil changes report which shows the change in number of barrels in stock of crude oil and its derivates.

This report tends to generate large price volatility, as oil prices impact on worldwide economies, affecting the most, commodity related currencies such as the Canadian dollar. National Association of Home Builders will release Housing market report which represents the number of sales and expected home buildings in future indicating housing market trend in the united states.