- Australian Dollar set for quite week? – US and Chinese data in focus
- Pound uncertain before EU Summit – Brexit still dominating headlines
- USD firm as safe-haven demand rises – Investors become skittish ahead of G20 meeting
- German Business index in focus – Business conditions to continue deteriorating?
Australian Dollar Ends Week Lower, Light Data Week Ahead
The Australian Dollar closed out last week down on its opening levels against both the Pound and US Dollar as Sterling recovered from its recent sell off and demand for USD remained strong.
This week there’s little Australian data to get excited about, so AUD volatility is more likely to be triggered by risk appetite, US growth data and China’s latest manufacturing reports.
That being said, today’s speech from RBA Governor Philip Lowe could be of interest.
Pound Sterling Fluctuates before EU Summit
After steadily gaining ground last week, the Pound stuttered before the weekend as Spain threatened to ‘stop the clock’ in Brexit negotiations over concerns over the future of Gibraltar.
While no single member of the EU has the power to block the deal, Brussel’s desire to have unanimous approval left investors jittery ahead of Sunday’s EU summit.
Brexit will remain one of the primary causes of Pound movement this week, but the Bank of England’s (BoE) Financial Stability report and UK consumer confidence data could also have an impact on demand for Sterling.
Euro Flat as Eurozone PMIs Disappoint
The Euro remained range bound on Friday as markets reacted to the Eurozone’s latest PMI figures.
They revealed that private sector growth in the bloc struck a four-year low this month, with EUR investors particularly concerned over the continued slowdown in Germany (its economy actually contracted last quarter).
The Euro is likely to remain on the back foot at the start of this week if Germany’s business climate index is also show to have slipped in November.
USD Exchange Rates Gain as Demand for Safe Havens Increases
Renewed demand for safe-haven currencies lent support to the US Dollar on Friday.
This was partly driven by a continued decline in equities, but was also down to nervousness ahead of a meeting between Donald Trump and XI Jinjing at the G20 summit later this week for fears the US-China trade dispute will remain unresolved.
Looking to the week ahead, USD investors are likely to focus on the latest US GDP estimate, with the US Dollar poised to strengthen if growth proves stronger in the third quarter than initially thought.
Plummeting Oil Prices Offset Rising Canadian Inflation
The Canadian Dollar failed to exert itself at the end of last week as stronger-than-expected Canadian inflation figures failed to offset a 5% rout in oil prices. Brent crude struck a one-year low and dampened demand for the oil-sensitive ‘Loonie’.
If this week’s Canadian growth data falls short the Canadian Dollar could have another disappointing week.
NZD Exchange Rates Set to React to Trade Data
Declining risk appetite pressured the New Zealand Dollar lower before the weekend, with NZD losing half a cent against the US Dollar.
NZD did stand firm against the Pound and Euro however as the European currencies faced troubles of their own.
New Zealand is set to publish trade data this week, with the Reserve Bank of New Zealand (RBNZ) also issuing its Financial Stability Report.
08:45 NZD Retail Sales Ex Inflation
09:15 AUD RBA’s Lowe gives a speech in Sydney
11:30 JPY Nikkei Japan PMI Manufacturing
20:00 EUR German IFO Business Climate
20:00 EUR German IFO Current Assessment
20:30 GBP BBA Loans for House Purchase
Post by TorFX