The US Dollar was under broad pressure which helped to push the Australian Dollar near to a 3-month peak as FX traders reassess the prospects of a Federal Reserve Bank rate increase in 2016. Disappointing US data also sapped the greenback’s momentum in the wake of the latest labor report. Yesterday, the US Bureau of Labor Statistics reported that nonfarm productivity fell to -0.5%, well below the 0.4% that analysts had been forecasting. That is the third straight decline in productivity, and currency strategists say that this is not good news for the Dollar’s outlook.
As reported at 10:57 am (BST) in London, the EUR/USD was trading at $1.1179, up 0.55%; the pair is currently just off the daily high which was set earlier at $1.1184 while the session low was at $1.1100. The AUD/USD is up about 0.70% to trade at $0.7721; earlier, the Aussie had hit a peak of $0.77240 while the session low was at $0.76580.
Fed Rate Hike Prospects Trimmed
Wholesale inventories also edged higher than analysts had predicted which suggests a slowing economy. Given the recent data, investors no longer have high expectations of a rate increase in December. At the present, FX traders will focus their attention on upcoming retail sales data from the US for a truer picture of consumer sentiment; due out on Friday, analysts are predicting a decline in retail sales figures for July.