The IFO business climate index increased to 109.3 from 107.4 in October. However, in yet another example of the widening fortunes of the core versus the peripherals, Italian retail sales failed to meet expectations. Their decline of 0.3% on the month tends to highlight the issues faced by the European Central Bank in having a one-size-fits-all approach, when fiscal policy is at odds.
With EUR/USD currently trading at 1.3516, the next big hurdle is the 50-day moving average and the highs of 19 November at 1.3580. Any break and close through this juncture could see additional momentum supporting the single currency. Support is found at 1.3380/90.
Following a better jobless claims number yesterday, the US job openings and labor survey (JOLTS) due out at 3pm (London time) is forecast at 3.830 million. The previous reading was 3.883 million. Any beating of the expectations here is likely to generate greater dollar strength, as traders price in a tapering of the asset-purchase scheme on better jobs metrics.
Not a day goes by without another FOMC member pontificating somewhere in the world. Today sees Federal Reserve member Daniel Tarullo speak at the Economic Policy Institute in Washington. It’s unlikely we will have any more clarity than usual, but we can expect a degree of volatility in the dollar crosses should any monetary-policy-related remarks hit the newswires.