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Pound Fluctuates, Canadian Dollar Flat as GDP Meets BoC’s Expectations

Pound News: Brexit Uncertainty Leaves Consumer Confidence at 6-Year Low

At the end of last week Sterling remained under pressure as data revealed UK consumers were feeling the weight of Brexit uncertainty and the UK general election. GfK showed consumer confidence remained stuck at -14, the joint lowest since 2013.

With less than two weeks until the UK’s general election, GBP is likely to make further gains if reports show the Conservative Party are likely to secure a majority as predicted by last week’s poll from YouGov.

However, looking ahead to this morning, the Pound could edge lower following the release of the UK’s manufacturing PMI. If data shows that the manufacturing sector sunk deeper into contraction territory in November, GBP is likely to fall.

Euro News: German Labour Market Remains Robust

At the end of Friday’s session, the Euro edged up slightly against a handful of currencies following the release of a mixed bag of economic data.

Retail sales in the bloc’s largest economy suffered the largest decline in sales since December 2018. However, further data revealed that the German labour market remained strong despite weakness in the manufacturing sector as unemployment edged lower, remaining near previous record-low levels.

Meanwhile, the single currency could edge lower this morning following the release of the Eurozone and Germany’s manufacturing PMI data. If the German manufacturing downturn deepens and the Eurozone PMI remains firmly below to no-change 50 mark, the Euro is likely to fall.

US Dollar News: US-China Trade Tension Resurfaces

The Dollar was left flat on Friday as trade tensions between the US and China resurfaced as Beijing warned it would retaliate after President Donald Trump ratified a bill backing the Hong Kong protestors.

Editor of China’s state-owned Global Times tabloid tweeted suggesting the threatened countermeasures could include barring the drafters of the legislation Trump signed from mainland China.

Disappointing US ISM manufacturing data could weigh on the ‘Greenback’ this afternoon. If the Federal Reserve’s preferred PMI measure reveals the manufacturing sector continued to decline, remaining below 50 for the fourth consecutive month, USD will fall.

Canadian Dollar News: ‘Loonie’ Flat Ahead of BoC Rate Decision

The Canadian Dollar was left muted against a handful of currencies on Friday as official data revealed GDP slowed to an annualised rate of 1.3% after a strong gain in the second quarter. This was in line with the country’s central bank’s target.

The country’s economy expanded, boosted by higher business investment and increased household spending which were in line with analysts’ expectations ahead of this week’s Bank of Canada (BoC) interest rate decision.

This afternoon could see the ‘Loonie’ edge higher following the release of Markit’s manufacturing PMI. If Canada’s manufacturing sector expands at a faster pace than expected in November, CAD is likely to rise.

Australian Dollar News: US-China Trade Pessimism Weighs on Risk Appetite

The Australian Dollar slumped against both the Pound and Euro on Friday and remained largely flat against the US Dollar as fresh US-China trade pessimism weighed on the currency.

Meanwhile, data revealed that new home sales in Australia stalled, slumping by a worse-than-forecast -0.5% in October.

Looking ahead, it is likely further reports on US-China trade negotiations is likely to cause movement of ‘Aussie’ exchange rates. If China reveals further countermeasures it is likely the decrease in risk appetite will weigh on the Australian Dollar.

 

Upcoming Data

Monday 2nd December

08:55     EUR German Manufacturing PMI (Nov)

09:00     EUR Eurozone Manufacturing PMI (Nov)

09:30     GBP Markit Manufacturing PMI (Nov)

14:30     CAD Markit Manufacturing PMI (Nov)

15:00     USD ISM Manufacturing PMI (Nov)

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