Housing starts for August were weak at -6.2% m/m with a figure of 895K. Also weak Oil inventories showed a -6.3M drop and initiated a significant oil rally. So looking ahead it seems we are right back where we started, liquidity has dried up and the dollar as suggested, weaker.
The Pound bounced higher with the euro on the back of USD weakness. UK data was weak with the Claimant Count Change at 32.5K vs. expectations 22.2K. The MPC minutes showed a change to 0-1-8 from 1-1-7 as the member calling for a hike relented. Overall the GDP/USD traded with a low of 1.7786 and a high of 1.8240 before closing the day at 1.8210 in the New York session. Looking ahead, August Retail Sales seen -0.5% vs. -0.8% drop in July.
The market is thin and this is why we are seeing such big moves in the market in nervous times. The euro benefited form the spike in oil as well, but overall the pound came out the strongest on expectations that the BOE will keep rates on hold.