China’s main indices attempted a rebound on Thursday after yesterday’s 3% slump, which was the biggest drop in five weeks. But earlier gains were pared to stand only marginally higher in late Asian session. The Australian dollar remained under pressure on renewed concerns on the health of China’s economy. The aussie hit a low of 0.7181 against the US dollar but later recovered to around 0.7200.
Crude oil prices also attempted to move higher following three days of sharp losses. Crude oil fell yesterday after a bigger-than-expected rise in US oil inventories. WTI oil futures were 0.4% higher on Thursday at $45.40. The Canadian dollar was stuck near yesterday’s lows as lower oil prices and a growth downgrade by the Bank of Canada continued to weigh on the loonie. The greenback was trading at 1.3117 against the loonie in late Asian session.
The euro was weaker against major currencies on Thursday as markets await the outcome of the European Central Bank’s latest monetary policy meeting later today. Although the ECB is not expected to announce any new stimulus measures, investors will be looking at the central bank’s willingness to expand or extend QE in light of the recent downside risks from the downturn in emerging market economies.
The single currency was down at 1.1332 against thedollar in late Asian trading and was also lower against the yen at 135.70. Against the pound, the euro was trading at 0.7343. Meanwhile, cable recovered slightly to 1.5432 after touching a low of 1.5411 earlier in Asian trading. But the dollar weakened against the yen on Thursday to drop to 119.74 yen.
Looking ahead to the rest of the day, UK retail sales are expected to show a year-on-year rise of 4.7% in September when released later today. Domestic consumption has been one of the biggest drivers of UK growth in recent in years and a positive figure would be indicative of growth holding up in the third quarter. The European Central Bank will announce its policy decision at 11:45 GMT and a press conference will follow at 12:30 GMT where Mario Draghi will speak. In the US session, the weekly initial jobless claims and existing home sales will be the main data coming out of the US.