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Pound reeling after government borrowing jump
EUR/USD has regained the 1.04 handle, despite further acknowledgement yesterday by the Latvian Central Bank Governor that the EU’s money printing exercise has failed to deliver any substantial boost to growth. We have the ECB economic bulletin due for release at 9am GMT this morning which could provide some direction in the short term, but the common currency isn’t looking as susceptible as it had been earlier in the week.
The overall bearish outlook is being maintained for AUD/USD although fundamental drivers for the Aussie dollar are looking thin on the ground. This could result in something of a reversion in the near term, especially if traders are looking to book some profits ahead of the year end, but with a view into 2017, further downside pressure is to be expected on the pair, especially if the hawkish tone is maintained by the Federal Reserve while recessionary fears bubble away in Australia.
US durable goods orders will constitute the big economic release today at 1.30pm GMT. The market is braced for a downturn here and the greenback looks generally resilient given the longer term hawkish stance the Fed is currently adopting. Potential may therefore be more on the upside if the print doesn’t come in looking quite as depressed as forecast.