Eurozone releases dominate the markets as oil prices fall to record low
28/Nov/2014 • Currency Updates•
The pound fell on greenback throughout the day on Thursday despite no UK data being released, losing 0.4% of its value against the dollar and effectively wiping out its gains from Wednesday. The UK currency has now lost over 1.5% of its value versus the dollar since the beginning of the month.
Thursday was one of the quietest days in the UK economy for a few weeks as traders continue to react from the GDP announcement on Wednesday. Chief economist at Markit economics Chris Williamson stated in an interview that ‘the clouds over Britain are being overplayed’, with the UK economy surpassing almost everyone’s expectations this year. Another very quiet day in the UK expected today with the only data releases of any note being Nationwide’s Housing Price change before trading at 7am.
A mixed day for the single currency as the euro appreciated by 0.25% versus sterling, but ended the day 0.3% down on the dollar.
Germany’s unemployment rate remained at a record low 6.6% in November, emphasising the gap in labour market conditions between the country and its struggling Eurozone peers. According to data released in early morning trading yesterday, the number of unemployed people in Europe’s largest economy fell by 14,000 this month, a greater decline than was anticipated. Inflation, however, was down on expectations, remaining stable in November and registering an annualised 0.6%, its lowest reading since February 2010. Bets on an ECB stimulus increase were reinforced, causing the euro to fall on the dollar during afternoon trading.
Elsewhere consumer confidence fell to -11.6, while economic sentiment rose by 0.1 to 100.8. ECB President Draghi also spoke at a conference in Helsinki yesterday, highlighting unemployment, a lack of productivity and structural reforms as the key downside risks facing the Eurozone area.
Data releases in the world markets today will be dominated by the Eurozone. The main announcement will come from Eurostat with the release of the November inflation figures and unemployment rate at 10am GMT. This is supplemented by a number of second tier releases including retail sales for Germany at 7am London time.
No data out of the US today due to Thanksgiving in the US. Despite the national holiday on Thursday, the US Dollar was able to climb on its major peers with the US Dollar index increasing by 0.35% after a number of mixed data releases elsewhere. The US currency has now climbed by almost 1% since the start of the month.
A lack of data out of the US today bodes for a quiet end to the week, with dollar volatility expected to be dependent on external announcements once again.
Rest of the world
The price of crude oil fell even further on Thursday after the OPEC oil producers’ cartel decided against cutting output at its meeting in Vienna. Following the release, Brent crude oil fell below $73 a barrel to its lowest level since August 2010. Oil dependant Russia and Norway suffered the most of all the major world economies. The ruble plummeted again by 2.5%, while the Norwegian krone lost over 1.5% of its value against the dollar over the course of the day.