The US dollar gave up some of the gains on Wednesday following the release of the FOMC meeting minutes. The minutes showed that Fed officials were divided on the course of interest rates. They also raised concerns about the underlying inflation with some members expecting inflation to remain below the Fed’s 2% target rate. On the other side, some hawkish members argued that there would be risks from the tightening conditions in the US labor markets.
On the economic front, data yesterday saw the UK’s unemployment rate falling to historic lows. Beating estimates, the unemployment rate in the UK slipped to 4.4%. However, wages continued to lag behind inflation. The British pound managed to post a modest recovery as a result. In New Zealand, the producer prices data showed a 1.4% increase in input prices, while output prices rose 1.3%, both beating the median estimates.
Looking ahead, the economic calendar today will include the UK retail sales which are expected to rise just 0.2%. In the eurozone, final inflation figures for July will be released. Consumer prices are expected to rise 1.3% on the headline and 1.2% on the core.
