The just released data in Britain indicated that retail sales declined more than expectations for October as consumers paused from a spending spree in September, slightly diminishing hopes that the economy will expand at a faster pace in the final quarter. Later in the day, weekly jobless claims and a regional Fed manufacturing data will be published in the US.

Yesterday, minutes from the latest FOMC policy meeting revealed an absence of strong consensus among officials for a rate rise in the next gathering and also reiterated that such a move would be data-dependent. Meanwhile, expectations are for the ECB meeting minutes today to confirm the policymakers’ intention to expand its asset purchase programme next month.

Pound Sterling – UK Markets

The just out retail sales data in the UK revealed that consumer spending was limited in October falling back from a noteworthy surge in September retail sales which was largely due to the promotions surrounding the Rugby World Cup which led to consumers going on a spending spree and the inclusion of the August Bank holiday. Also, some shoppers are likely to have held back their purchases in the hope of some great deals during Black Friday which falls at the end of this month. The downturn in last month’s retail sales growth was worse than anticipated. Looking at related indicators, the BRC retail sales monitor and CBI distributive survey displayed similar weakness, recording big falls for October. The Pound has surrendered some of its earlier day gains against the US Dollar, post the dismal UK retail sales print. However, the pair continues to trade well above the 1.52 mark due to broad based weakness in the greenback across the board.

Going forward, UK’s official public finances data is scheduled tomorrow with markets expecting a decline in government borrowing for October.

US Dollar – US Markets

In late night trading, the Euro – US Dollar currency pair recovered partly from its previous session losses following the publication of the FOMC minutes, which were not as hawkish as expected. Minutes of the October US Fed monetary policy meeting revealed that the board members continued their debate, failing to boost the probability of a December rate rise. Though a majority of policy setters made it clear that an interest rate increase would be considered at the next month’s meeting, but some participants remained wary that an imminent rate rise could stifle the momentum of the economy. The FOMC members regardless of their takes on the timing of the first increase were of the same opinion that the path of future rate rises should be gradual.

Sentiment for the greenback continues to remain subdued this morning. Later in the day, market participants will focus on speeches by some key Fed officials and a pair of US economic reports – jobless claims and the Philadelphia Fed manufacturing survey results to strengthen the case for a December rate rise.

Euro – European Markets

In yesterday’s trading session, the shared currency had dropped to multi-month lows against the US Dollar ahead of the release of minutes of the FOMC’s monetary policy meeting, but the currency pair quickly regained lost ground in late trading as the Fed sounded less hawkish than anticipated. In economic news, construction output in the 19-nation single currency union continued to decline in September, suggesting that the industry is yet to join in the Euro zone’s moderate economic recovery despite a revival in other sectors.

This morning, the Euro has given back some part of its gains against the greenback. After the Fed’s publication of its minutes yesterday, minutes of the European Central Bank’s (ECB) last monetary policy meeting due later today will be closely watched and is expected to reinforce expectations of further easing in December. The ECB minutes could also highlight the downside risks to the wider Euro area economy particularly with respect to the recovery of inflation. Last week, data had showed that inflation in the Euro bloc slipped back into deflationary territory, thus strengthening the case for a rate cut.

Other Currencies – Highlights

Currently, the US Dollar – Swiss Franc currency pair has retreated from some of its earlier losses. Economic data released earlier in the day indicated that Swiss trade surplus widened well above market expectations for October as growth in the import volumes was slower than exports. Data indicated that the lackluster growth in Swiss exports was due to a continued decline in watch sales abroad which was offset by a rise in foreign sales by chemical and pharmaceutical companies in the last month. However, greater slips in imports compensated for slower export volume growth in Switzerland’s trade balance. However, the data had little impact on trading in the currency pair today. In the session ahead, traders will make note of US economic data releases and some key Fed speeches to gauge the direction in the currency pair.

The pair had slipped below the 1.02 mark against the Swiss currency in late trading yesterday in response to the Fed’s latest monetary policy meeting minutes, which failed to confirm an increase in the benchmark interest rate in its next policy meeting.