Daily Market Report - 31/10/2014

The Dollar saw limited gains during Thursday’s session despite the US economy expanding more than forecast in the third quarter, validating the optimism that prompted Federal Reserve policy makers to stop pumping money into financial markets. Gross domestic produc (GDP) grew at a 3.5 percent  in the three months ended September after a 4.6 percent gain in the second quarter, it marked the strongest back-to-back readings since the last six months of 2003.

Reports confirmed government outlays and a shrinking trade deficit boosted growth last quarter, buying time for consumer spending in the world’s largest economy to strengthen as fuel prices drop and hiring picks up. Fed officials yesterday cited the improvement in the job market in deciding to end their bond-buying program and stay on course toward interest rate increases next year.

Also out for the US was unemployment claims which revealed fewer Americans filed applications for unemployment benefits over the past month than at any time in more than 14 years, a sign the strengthening U.S. economy is buoying the labour market. 

The Euro struggled yesterday after inflation figures revealed the German Preliminary consumer pricing index (CPI) turned negative. The CPI has registered -0.3% when measured month on month, this represents a further fall on last months figure and also came in well below market analyst’s estimates for a minor deflationary figure of -0.1%. 

Year on year the CPI has managed to hold onto its 0.8% growth reading, this provided some negative surprise as a figure of 0.9% was also expected this month, raising concerns over the health of the economy. 

Key Announcements:
10:00 EUR: Eurozone inflation (Oct) Expected to rise from 0.4% to 0.3%  

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