EUR/USD sitting back and enjoying the show - for now
With all the action in Sterling at the moment, there seems to be little action to note in EUR/USD, which has been stuck in the low 1.1000's since the climbing back above the figure level last week. After a brief push through 1.1050 in the wake of soft US data last week, sellers have since contained the move and we have been struggling for direction since.
Earlier this morning, the latest inflation figures out of the Eurozone given the market little impetus to challenge limits either way, with headline CPI coming in at a lower than expected 0.8% vs 1.0% previously. Markets were looking at a 0.9% reading. That said, we saw a 0.2% rise in September as forecast, so base effects are impacting here. Also negating the headline number is the core rate, which rose from 0.9% to 1.0% as anticipated. Under the circumstances - with Europe in a clear downturn - it is hard to see any material pick up here, and the ECB has already accommodated its monetary policy, so market participants are in 'wait and see' mode.
As such, we are more likely to see movement here dictated by the crosses, including EUR/GBP, which has so far dipped into the low 0.8600's, recovering since. Either way, the impact has been modest at best, with Cable gains having dragged the EUR spot rate higher - briefly.
US data later on this afternoon - retail sales - is more likely to have an impact given the larger emphasis on the USD here.