Big week for the USD: US data and rate decision ahead
GBP: Brexit ‘flextension’ continues to force GBP into sideways trading - directionless, but at elevated levels. The market is waiting for, but doesn’t want, ‘surprises’ before we see any direction. Currently at 1.1550 GBP/EUR and 1.2850 GBP/USD, broadly unchanged for the last week.
EUROPE: Economic data to watch this week from Europe includes key Employment and Consumer data from Germany tomorrow. Germany, the ‘engine room’ of Europe is close to falling into a technical recession after economic activity contraction in Q3 of 2019. As a result, this data will be keenly watched.
Overall GDP figures and European unemployment is released on Thursday before Italy, France, Spain to name a few, have a bank holiday on Friday for All Saints day.
Reports have also started to emerge around the topic of progress with the US and China trade talks. Next month seems to be the timelines for an agreement to be signed between Presidents Trump and Xi on a first-phase trade deal. US/China trade tensions have been attributed to the growing concerns about a global slowdown in economic activity and growth. (The IMF sharply downgraded growth forecasts earlier this month to its lowest level since the recession of 2008-09 at less than 2%.)
USA: EUR/USD has not moved significantly for 3 weeks, and tihs week could see that all change.
There is a lot of Economic data for the US released this week as November is around the corner, meaning the next monthly economic cycle of releases starts. Later today Consumer Confidence is released along with Pending house sales, both are expected to show a contraction according to FXStreet.
Tomorrow US GDP figures are released and expected to show a contraction. This is supported by weak September US durable orders which has suggested manufacturing is still contracting.
Wednesday also sees the US Interest Decision announcement which is widely expected to show a further cut to 1.75% from its current level of 2%. This, if confirmed, would be the third straight rate cut in a row. Additional attention may want to be put on what the Federal Reserve Chairman Jerome Powell suggests thereafter, whether this is the end of the easing cycle, or whether he leaves it open for more cuts.
Non-Farm Payroll is released on Friday which is another large release which traditionally impacts the value of the USD on the currency market. Volatility may be ahead of us, with the market taking advantage of these data releases to trade into the end of the year.