EUR/USD gained 8 points as traders breathed a sigh of relief when PMI numbers were not as bad as expected. The US dollar gave back some early gains but remains strong at 82.29. Data from Germany eased pressure on the struggling euro today after speculation of an earlier rate rise from the Federal Reserve had pushed the dollar to an 11-month high. Share markets had been feeling flat following a disappointing survey on Chinese manufacturing overnight but they too got a lift from the news that Germany’s private sector grew for a 16th month running in August.
GBP/USD is trading at 1.6588 down just 6 points after a strong retail sales release. The pound, down more than six cents in the past month, had gained a foothold on Wednesday after minutes from the Bank of England’s own last policy meeting showed the first dissenting votes on its policy committee for a rise in interest rates. But a similarly hawkish message from the Fed sent the dollar higher across the board after UK markets closed, driving the pound to less than $1.66 for the first time since early April.
AUD/USD lost 6 points to trade below 93 touching 0.9296 after a speech from RBA Governor Stevens. In Australia, the Reserve Bank Governor gave testimony to the House of Representatives Economics committee. In the US, weekly mortgage finance data is released with the minutes of the last Federal Reserve meeting.
Gold tumbled $13.60 to trade at 1281.60 as traders moved to more profitable assets. Gold extended losses to a fifth session on Thursday, dropping to a two-week low after the US dollar strengthened on indications from the US Federal Reserve that it could raise interest rates sooner than expected. A surprisingly strong recovery in the US job market could lead the Fed to raise interest rates earlier than it had been anticipating, minutes from the Fed’s July meeting showed, although most officials wanted further evidence before changing their view.