Pound News: Investors Support Sterling Following UK Brexit Minister’s ‘Thumbs Up’
While Sterling’s moves yesterday were not hugely significant, the British currency was able to hold onto its Monday gains against most major currencies following news that Brexit Minister Dominic Raab had left a key cabinet meeting giving a ‘thumbs up’ to reporters.
Earlier in the session, the Pound had been weakened by comments from DUP Chief Whip Jeffrey Donaldson, who had predicted that UK-EU Brexit negotiations were headed for a ‘no-deal’ scenario.
Data releases are unlikely to influence the Pound much today, so Sterling investors will once again focus on any potential Brexit negotiations. Investors are increasingly hopeful that negotiators will finally close on a deal this month.
Euro News: Euro Avoids Further Losses as October PMIs Beat Projections
While the Eurozone’s manufacturing PMI results fell short of projections at the end of last week and made investors anxious about how US trade uncertainty was denting the Eurozone’s economic activity, other Eurozone PMI data wasn’t quite as gloomy.
Tuesday saw the publication of the Eurozone’s final October services and composite PMI results – which actually beat forecasts in both Germany and the Eurozone overall. These lifted some of the concerns about how quickly the Eurozone’s economic strength was fading.
Eurozone retail sales results from September will be published today and they could influence some Euro movement. The shared currency may also be influenced by any sharp US Dollar movements.
US Dollar News: Investors Wary on US Dollar following Midterm Elections
A Brexit boost helped the Pound to keep climbing against the US Dollar on Tuesday – adding to market caution ahead of the US midterm elections which made investors hesitant to buy the US Dollar.
Traders are anxious that if the Democrats performs strongly in elections, it could weaken US President Donald Trump’s ability to pass fiscal policy plans through Congress.
If the election results are surprising it could be the primary cause of US Dollar movement today. Failing that, other aspects of risk-sentiment, such as US-China trade hopes, could drive the US Dollar instead.
Canadian Dollar News: USD Weakness Weighs on Canadian Dollar
Recent Canadian data has been solid and the Bank of Canada (BoC) has remained hawkish about its monetary policy plans – but the Pound to Canadian Dollar exchange rate has still been climbing.
Mixed market demand for risk sensitive trade-correlated currencies like the Canadian Dollar, as well as weakness in its neighbour the US Dollar (USD), have kept pressure on the Canadian Dollar this week.
If the US Dollar plunges following the midterms today, the Canadian Dollar could see further weakness. However, the Canadian Dollar could find support in today’s Ivey PMI from October.
Australian Dollar News: Optimistic Reserve Bank of Australia (RBA) Fails to Bolster AUD
The Pound to Australian Dollar exchange rate was able to avoid losses on Tuesday, thanks to Brexit speculation boosting Sterling and risk-aversion keeping pressure on the Australian Dollar.
Investors largely brushed over the Reserve Bank of Australia’s (RBA) November policy decision, in which it left policy frozen as expected, but did raise its growth forecasts which typically would have supported AUD strength.
No notable Australian data has been published today, so the Australian Dollar is more likely to react to shifts in risk-sentiment and political news as investors anticipate Friday’s home loans stats.
Wednesday, 7th November
07:00 German Industrial Production
07:00 German Construction PMI
10:00 Eurozone Retail Sales
15:00 Canadian Ivey PMI
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