Yesterday’s US GDP data complimented the weaker than expected UK GDP figure from earlier in the week giving yet another piece of evidence of slowing growth. The dollar didn’t react much to the softer numbers as normally you would expect a sell off after such a release, but Wednesday’s FOMC statement remains firmly in the mind of investors and we’ve seen the probability of a rate rise in November increase a little. With growth lower the focus on inflation will increase into year end and we saw the BOJ overnight delay their 2% inflation target by six months to the second half of 2016. The Yen weakened initially with USDJPY moving up to 121.50 but since has retraced back to 120.75 at the time of writing.
Being the last day of trading for October There could be some volatility today which we’ve already seen in USDJPY. Next week is a very busy one for the economic calendar with manufacturing and services surveys from both sides of the Atlantic, the Bank of England Inflation Report and then a nonfarm payrolls finale.
Further reading:
EUR/USD fails to break above 1.10 on first attempt
Busy month coming to an end – Live Market Open from 8:00 GMT
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