The Dollar has moved sideways in the past 24 hours with Fed Chairperson’s testimony to Congress seemingly having little impact – probably because he ultimately said nothing new. His base-case scenario is that the Fed policy rate will remain on hold but there are clear downside risks to the US economy from the ongoing trade war with China.
It is the Australian Dollar which this morning grabbed the headlines, weakening to a 6-week low following the release of disappointing labour market data. Total employment fell by 19,000 in October, the first monthly fall since July 2018. With the RBA having put a lot of emphasis on the health of the labour market, this latest set of figures has re-ignited market concerns that the RBA will have to cut its policy rate further in coming months.
The Euro showed little reaction to data revealing that Germany – the EU’s largest economy – had skirted a technical recession in Q3 by the narrowest of margins. German GDP, which had contracted 0.2% qoq in Q2, rose a measly 0.1% qoq in Q3 and recent data suggest that growth remained weak in early Q4.
