Bank of England, US Data Drive Headlines Thursday
Monetary policy and economic data will keep investors busy on Thursday, as high-profile releases from both sides of the Atlantic are scheduled.
The Swiss National Bank (SNB) will deliver a policy decision at 07:30 GMT, where officials are widely expected to keep interest rates at -0.75%. The SNB slashed interest rates to -0.75% back in early 2015 and has remained on the sidelines ever since.
The Bank of England’s policy meeting later in the day is expected to be more interesting, as officials continue to debate the pace and timing of future rate hikes. Although the BOE is widely expected to keep policy unchanged, at least two members of the Monetary Policy Committee (MPC) will likely vote in favour of raising interest rates.
Britain’s central bank will deliver its rate decision at 11:00 GMT.
Key European data releases include French and Italian consumer inflation, as well as Greek unemployment.
In the United States, all eyes are on consumer inflation data, which are scheduled for release at 12:30 GMT. The consumer price index (CPI) is forecast to rise to 1.8% in the 12 months through August. So-called core inflation, which strips away volatile food and energy costs, is predicted to come in at 1.6%.
The Labor Department will also release its weekly jobless claims report at 08:30 GMT.
Earlier in the day, the Australian government reported that overall employment surged last month, a sign that the domestic economy was regaining momentum. Australian employers added 54,200 workers in August, the national statistics bureau reported Thursday. More importantly, full-time jobs climbed 40,100.
Meanwhile, China reported slower than expected growth for retail sales, industrial production and urban investment last month.
The Australian dollar shot up after the stronger than expected jobs report to reach a session high of 0.8020 US. The AUD/USD was last up 0.3% at 0.8004. The pair is trading roughly 120 pips below its recent year-to-date high. The Aussie currency continues to struggle at the 80-cent level. This is likely to continue in the near term as the Reserve Bank of Australia conveys the potential downsides of a strong local currency.
The euro fell nearly 100 pips against the dollar on Wednesday, extending last week’s correction. The EUR/USD continues to show upside momentum, but that could be disrupted by US inflationary data on Thursday. Solid CPI figures may compel the Federal Reserve to raise interest rates this year, thus helping to shore up the US dollar.
Cable is down more than 100 pips from its 13 September high, which also happened to be the highest level of the year. The GBP/USD is currently trading just above the 1.3200 level. Price activity is expected to remain limited ahead of the BOE rate decision.