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Risk-Sentiment Continues to Rise, German Trade Data Concerns Investors

Pound News: UK Growth Forecast to be Slowest in EU

The Pound came under pressure yesterday as the European Commission (EC) published its latest growth forecasts for EU members. Its forecast for UK growth was particularly gloomy.

The EC forecast that Britain would have the slowest growth of EU members in 2019 – though the nation will technically leave the EU next year. Sterling avoided major losses however, amid hopes that a UK-EU Brexit deal could be agreed in the coming weeks.

Most of this week’s most influential UK data will be published today, including UK growth stats for September and Q3, as well as trade balance data and business investment stats.

 

Euro News: Eurozone Trade Concerns Weigh on Shared Currency

While some of this week’s Eurozone ecostats have beaten forecasts, the data has overall continued a trend of indicating that economic activity in the Eurozone is slowing towards the end of the year.

The Euro was even less appealing on Thursday, following a disappointing German trade balance report. The data showed that German exports and imports unexpectedly contracted in September, worsening concerns about how US trade protectionism was impacting the Eurozone economy.

Today’s most notable Eurozone data will be France’s September industrial production report. Unless there is disappointing Brexit news, the Pound to Euro exchange rate is likely to end the week higher.

 

US Dollar News: USD Steadies as Election Reaction Cools

Investors sold the US Dollar on Wednesday in reaction to news that the US Democratic Party had taken majority control of the House of Congress. However, as the election largely went as polls predicted, the reaction was ultimately limited.

The US Dollar recovered slightly yesterday, firming as investors anticipated November’s Federal Reserve policy decision.

Reaction to the Fed decision is likely to dominate US Dollar movement today, depending on how the bank’s tone is digested. Some notable US data will be published this afternoon too, including Michigan University consumer sentiment data for November.

 

Canadian Dollar News: Mixed Canadian Housing Stats and Oil Prices Weigh on CAD

While domestic Canadian news has generally been strong lately, some underwhelming Canadian housing price stats from September weighed on the Canadian Dollar yesterday.

Prices of oil, Canada’s most lucrative commodity, have also been falling this week due to rising global supply. As a result, the Pound was able to remain strong against the risky oil-correlated Canadian Dollar.

No notable Canadian data will be published today, so the Pound to Canadian Dollar exchange rate will continue to react to risk-sentiment and oil prices.

 

Australian Dollar News: Chinese Trade Data Boosts ‘Aussie’

Market demand for risky trade-correlated currencies like the Australian Dollar has risen since the US Mid-Term Elections ended, but the Australian Dollar found further support on Thursday thanks to some strong data from Australia’s biggest trade partner.

China’s yearly October exports figure came in at a strong 15.6% and imports printed at 21.4%, both well above economist expectations.

Reaction to Australia’s September home loans stats or the Reserve Bank of Australia’s latest statement on monetary policy is likely to drive the Australian Dollar today.

 

Upcoming Data

Friday, 9th November

00:30    Australian Home Loans

07:45    French Industrial Production

09:30    UK Trade Balance

09:30    UK Growth Rate

09:30    UK Business Investment

09:30    UK Industrial and Manufacturing Production

15:00    US Michigan Consumer Sentiment

15:00    US Wholesale Inventories

David Worthington

Currency Dealer 

daw@fcgworld.co.uk

 

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