The day dawned with the release of Britain’s labour market statistics. UK’s ILO unemployment rate surprisingly dropped to 4.8% in the three months to September. Average weekly earnings advanced during the same period. Meanwhile, the number of jobless claims substantially increased in October compared to the previous month.

The Eurozone economic calendar seems to be taking a breather after witnessing a flurry of economic releases yesterday. Across the Atlantic, trading is likely to be impacted by reaction to reports on producer prices, industrial production and homebuilder confidence.

Pound Sterling – UK Markets

The Pound is trading higher against the US Dollar and the shared currency this morning, after the just out data showed that UK’s ILO unemployment rate slipped to 4.8% during the three months to September, the lowest level in over a decade. Average weekly earnings advanced for the same period. Meanwhile, the number of jobless claims significantly increased in October from the prior month.

Yesterday, Sterling ended lower against its key peers, after figures from UK’s office for national statistics showed that British inflation unexpectedly slipped in October, pushed down by the decline in clothing prices and tuition fees. However, the Bank of England Governor, Mark Carney brushed aside last month’s weak inflation figures as a blip and warned that UK’s inflation would rebound in the coming months as the Brexit-fuelled slump in the Pound sparks price rise. He highlighted October’s factory-price inflation, which registered its biggest increase since April 2012. Separately, the house price index showed that UK house prices rose in September as a dearth of homes going on sale pushed up prices.

US Dollar – US Markets

The greenback strengthened against its major peers yesterday, after the US advance retail sales advanced more than expected in October, posting the strongest performance in two years, and increasing expectations for an interest rate rise by the Federal Reserve (Fed) in December. Meanwhile, the import price index rose more than expected, while export price index increased in line with market expectations in October. Separately, the Boston Fed President, Eric Rosengren, stated that market expectations for an increase in interest rate by the end of this year is likely correct. He further reiterated his worries that waiting too long to raise rates could disrupt the path of economic recovery.

The greenback is trading mixed against the Pound and the common currency this morning. Market participants will focus on US MBA mortgage applications, NAHB hosing market index, capacity utilisation and industrial production data, all scheduled later in the day. Tomorrow, traders will keenly watch the US consumer price index for further cues in the US Dollar.

Euro – European Markets

The shared currency is trading lower against the Pound this morning. The Eurozone economic calendar is devoid of any data releases today. Looking ahead, there are a couple of economic data-points lined up for the next two days. This includes the Euro region’s consumer price index and German producer prices data.

Yesterday, there were several economic releases from the Eurozone. The region’s seasonally adjusted trade surplus widened to a 5-month high level in September. Further, a report by the European Union’s statistics office showed that the Eurozone GDP expanded by 0.3% during the third quarter, at par with the April-June figure. Separately, the Euro region’s ZEW Indicator of Economic Sentiment surpassed investor expectations in November. Meanwhile in Germany, index of economic sentiment accelerated during the same month, rising for the fourth time in a row. However, the current situation index missed expectations and declined in November.

Other Currencies – Highlights

The Kiwi Dollar is trading on a weaker footing against the US Dollar this morning, falling for the sixth consecutive session, as robust economic data releases from the US have helped extend the greenback’s rally. The US Dollar has been on a roll lately, after the newly elected US President, Donald Trump, vowed to cut taxes and spend more on infrastructure, which in turn is likely to stoke the nation’s growth and inflation rate. Closer home, the overnight gains in dairy prices were not enough to offset overseas influence on the Kiwi Dollar. Global dairy prices rose for the seventh straight month at the latest Global Dairy Trade auction, amid a continuous drop in supply. Moreover, New Zealand’s main export, whole milk powder, advanced to its highest level since July 2014. Going ahead, the Reserve Bank of New Zealand’s bi-monthly financial stability report and New Zealand’s producer price index are up for release later today.

Separately, activity in New Zealand's service sector, which accounts for about two-thirds of the economy, accelerated in October.