Major currencies have had diverging fortunes in today’s session. The Dollar is down slightly for the second consecutive session following the release of disappointing US labour market data for September. Non-farm employment rose by only 136,000 – the lowest figure in four months – but more notable was the slowdown in weekly earnings growth to 2.9% yoy, the slowest rate since October 2018. Another 25bp Fed rate cut this year looks now increasingly likely.
The GBP/USD cross, which only 24 hours ago had breached 1.24, has fallen back to 1.23. Sterling continues to beat to the Brexit tune and reports that the EU has given Prime Minister Johnson just a week to revise a new Brexit plan which the EU views as unacceptable in its current format.
Conversely, the Australian and Kiwi Dollars have continued to appreciate. The Aussie Dollar, which is up for the second consecutive session, initially wobbled following the release of Australian retail sales data for August (+0.4% mom) slightly below analysts’ forecast of 0.5% mom. But the Australian currency was given a firm boost by RBA Assistant Governor Ellis who pointed to the manufacturing sector’s strong performance and increasing Australian exports. The Kiwi Dollar, which rallied in sympathy, has now
strung three consecutive up sessions to its strongest level in three weeks in trade-weighted terns.
