Pound News: EU Suggestion that Article 50 Could be Cancelled Boosts Pound
On Tuesday, European Court of Justice (ECJ) Advocate General Manuel Campos Sanchez-Bordona suggested that if it wished, the UK would likely be able to unilaterally reverse Article 50 and cancel the Brexit process.
Bets that the UK will not leave the EU are low, but speculation of a second referendum has risen in recent weeks. The Pound was able to recover slightly from Monday’s fall in reaction to the ECJ Advocate General’s comments.
UK services PMI stats from November will be published today. A typically influential report, they are unlikely to influence the Pound outlook much this week as investors look ahead to next week’s key UK Parliament vote.
Euro News: Eurozone Growth Uncertainty Weighs
The Euro put on a mixed performance on Tuesday amid a lack of notable Eurozone ecostats. The currency has been benefitting slightly from weakness in its rival, the US Dollar (USD), but has also been feeling the pressure due to Eurozone growth jitters.
Monday’s Eurozone manufacturing PMIs from November did beat projections, but still confirmed an easing in output from October, with the overall Eurozone manufacturing PMI coming in at just 51.8.
Some more notable Eurozone data will be published today, including the bloc’s final November services and composite PMIs, as well as October retail sales. These could bolster Euro support if they impress investors.
US Dollar News: US Treasury Yield Drop Knocks USD
After already trending lower on the weekend’s US-China trade truce announcement, the US Dollar broke below key support levels on Tuesday as it was dragged down by news that longer-term US Treasury yields were weakening.
5-year Treasury yields fell below 2-year yields for the first time since the 2008 financial crisis. It was the latest sign that markets expected US growth to slow in the coming years, which left the US Dollar tumbling.
November’s highly influential US non-manufacturing PMI from ISM will be published this afternoon. If the data disappoints investors, the US Dollar is likely to extend its losses.
Canadian Dollar News: Canadian Productivity Beats Forecasts
The Pound to Canadian Dollar exchange rate rebounded from its worst levels yesterday, but its gains were limited. The Canadian Dollar found some fresh support in the form of Canada’s Q3 labour productivity report, which beat 0.2% forecasts and only slowed to 0.3%.
On top of the data, the Canadian Dollar also found support as prices of oil, Canada’s biggest export, continued to strengthen following the weekend’s US-China trade truce.
Today could be a key session for the Canadian Dollar, as investors anticipate what tone the Bank of Canada (BoC) will take about its 2019 monetary policy outlook.
Australian Dollar News: Risk-Sentiment Keeps ‘Aussie’ Appealing
The market’s appetite for risk-correlated currencies like the Australian Dollar has kept the currency buoyed since the US-China trade truce was announced at the weekend, despite Australia’s domestic news being mixed.
Yesterday, the Reserve Bank of Australia (RBA) maintained its cautious tone on the economy. Analysts reacted by suggesting that the RBA may not hike Australian interest rates until 2020 at the earliest.
Wednesday, 5th December
00:30 Australian Growth Rate
08:30 ECB Draghi Speech
09:00 Eurozone Services and Composite PMI
09:30 UK Services and Composite PMI
10:00 Eurozone Retail Sales
13:15 US ADP Employment Change
13:30 US Non-Farm Productivity
15:00 Bank of Canada (BoC) Policy Decision
15:00 US Non-Manufacturing PMI
15:15 Fed Chair Powell Testimony
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