- We got to Friday and the US dollar seems to have taken a break from the gains and retraced some of its recent move against major peers ahead of key economic data due today. US PCE Deflator, personal spending and income and, University of Michigan Consumer sentiment data can add more certainty for the Fed to pause next week.
- GDP released yesterday at 4.9%, vs. 4.5% estimates showed that the US economy is “healthy”, according to Fed’s Yellen. This boom in growth was generated by seasonal factors and it should be set to reverse in 4Q.
- It is a quiet day on the euro front – after the big jump on US GDP on Thursday and the ECB leaving its rates unchanged, one would have expected for the pair to be sold, but it did not happen. We’re slightly higher today but it’s a dollar story, again, while investors wait for key US data. We are currently trading just below 1.0560.
- Sterling keeps trading on the bearish channel that started in July, where we peaked at 1.3141. 1.20 looks like the immediate psychological support for Cable followed by the key 1.18. BOE’s meeting will be on the 2 Nov. where we expect a hold in rates.
- Dollar-Yen remains above 150 as consumer prices in Japan jumped to 3.3% YoY, vs. 2.8% estimates.
