The focus of trading yesterday evening was almost certainly from the UK with another outperformance of economic data but importantly probably the key data that the Bank of England and the market is focused on, unemployment. The UK Unemployment rate dropped to 7.7% after the Claimant Count Change decreased by 32,600, both ahead of expectations. The Pound surged against its traded peers, up a cent versus the Greenback to 1.582 USD and taking over 0.8 from the Aussie but trading now back at 1.6320 AUD. The gains against the AUD were not as pronounced due to the fact it was well supported and clearly back above 93 US cents again, peaking at 93.38 US cents.
Earlier this morning the RBNZ kept rates on hold at 2.5% but it was the signal they sent through their statement that rippled through trading. Governor Graeme Wheeler in the statement said “OCR increases will likely be required next year” highlighting inflationary concerns from the housing market which sent demand for the Kiwi into immediate effect now trading above 81 US cents. It picked up even more than the half a cent it picked up versus the Greenback from the Aussie, which is now at 1.1472 NZD and 0.8 cents down post release.
Trading activity is unlikely to slow at all this morning with RBNZ Governor Wheeler speaking again before the NZ government finance committee at 11.10am. The local focus will be glued to the unemployment rate which will be released at 11.30am and expected to increase to 5.8%. The seasonally adjusted participation rate is likely to heavily influence the outcome.
Joel Murphy
www.pepperstone.com Joel Murphy is a currency analyst and market commentator for Forex Broker Pepperstone and he regularly features on Sky Business News Australia. He has worked in both retail and institutional Forex for last 8 years and completed a Bachelor of Commerce and a Bachelor of Arts from Monash University
