USD corrected over the course of yesterday’s European trading session despite slightly higher PPI and lower jobless claims numbers. Both GBPUSD and EURUSD bounced off prior support levels as a result.
However, as we went into the evening, USD gained back after Federal Reserve (Fed) Chair Powell emphasised the strength of the US economy and once again dampened the prospects of rate cuts in the Fed's easing cycle.
*Daily move - against G10 rates at 7:30am, 15.11.24
** Indicative rates - interbank rates at 7:30am, 15.11.24
GBP is lower across the board this morning after GDP numbers showed the economy contracted by 0.1% in September and grew by only 0.1%, versus the original forecast of 0.2%, in Q3.
Following the impressive run USD has been having since October, it seems like markets are now repositioning themselves, with the currency correcting itself yesterday. However, given there hasn’t been any negative news stateside, there's a feeling that the ‘Trump trade’ still has momentum and might continue in the longer term. Thus we continue to feel that USD buying clients should use any weakness in the currency as an opportunity to hedge against the potential for the Trump trade to continue.
US retail sales numbers are due today.
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