The US dollar rallied then reversed on Friday, as traders reacted to a stronger than expected GDP reading then booked profits quickly. The US economy grew by 2.9% in Q3, outpacing the consensus of 2.5%, while the price index for the same period also posted a stronger than expected 1.5% increase. Meanwhile, the UoM sentiment figure was downgraded from 87.9 to 87.2 to show weaker optimism. Today has the core PCE price index, along with personal spending and income data, lined up.
The euro was able to keep up its climb until the end of the week even as data came in mixed. French CPI and consumer spending fell short of estimates but Germany and Spain reported stronger than expected inflation figures. Euro zone CPI estimates are up for release today and the headline reading is slated to rise from 0.4% to 0.5% while the core figure could hold steady at 0.8%. German retail sales and Italian CPI are also due.
The pound gave up some of its recent gains since there were no reports to give the UK currency support on Friday. The GfK consumer climate index ticked down a couple of notches from -1 to -3 to show more pessimism. Today has mortgage approvals and net lending to individuals data lined up.
The franc recouped a lot of its losses at the end of Friday’s New York session on profit-taking. Swiss data was also stronger than expected, as the KOF economic barometer rose from 101.6 to 104.7, higher than the estimate at 101.8. There are no reports due from Switzerland today so the franc could trail the euro or react to market sentiment.
The yen was off to a weak start after reports released over the weekend came in below estimates. Industrial production was flat in September versus the projected 0.9% gain while retail sales fell 1.9% on a year-over-year basis versus the projected 1.7% slump. Housing starts data is still up for release next.
Commodity Currencies (AUD, NZD, CAD)
The comdolls were mostly weaker for the day as strong US GDP reinforced projections of higher borrowing costs, which could then weigh on global demand. Australia’s PPI was also weaker than expected at 0.3% versus 0.6%. Earlier today New Zealand reported a drop in its ANZ business confidence index from 27.9 to 24.5. Australia’s MI inflation gauge fell from 0.4% to 0.2% while its private sector credit posted another 0.4% gain as expected.