Forex Market Recap (10-15 October 2021)

We saw choppy and mixed price action last week as traders set aside pandemic concerns and eagerly anticipating fresh inflation data and more clues on potential policy changes from central banks. The GBP was a strong performer, finding support or rising speculation that the BoE is ready to hike rates soon.

USD:

• Record 4.3M workers quit their jobs in August, led by food and retail industries
• Policymakers said economy has healed enough to start tapering next month
• Fed’s Bostic says inflation is elevated but not at the point where it would affect the Fed's stance on interest rates
• Fed’s Bullard says bond purchases should be tapered quickly in case rate hikes are needed
• Consumer prices rise more than expected as energy costs surge
• Higher prices help to boost retail sales in September

EUR:

• Italian industrial production down 0.2% vs projected 0.4% drop
• ECB’s Knot warns investors of risks of higher inflation
• French final CPI down another 0.2% as expected
• ECB’s Centeno says inflation rise still seen as temporary

GBP:

• BOE’s Saunders seen pushing for bigger-than-expected rate hike
• Retail sales recovery slows further in September as consumer confidence wanes
• Job vacancies reach 20-year high
• Payrolls rise above pre-covid levels with record hiring

CAD:

• Manufacturing sales rose 0.5% in August
• Sales in the wholesale trade sector rose 0.3% in August to $70.3 billion

JPY:

• Producer price index at 13-year high
• Power prices hit 9-month highs amid global energy crunch

AUD:

• Australia’s rising business confidence "reflects hope rather than reality"
• RBA deems climate change “first order risk” to economy
• Australia’s unemployment rate rose to 4.6% in September – and the labour market might not recover before 2022

NZD:

• Card spending edges up as COVID-19 alert level changes
• ANZ business confidence index down from -7.2 to -8.6