Canada Markets closed

Brexit and a Choppy GBP, with the EUR and Inflation in Focus

Bob Mason
With economic data on the lighter side, we can expect geo-politics to continue to take center stage, the Pound in desperate need of good news.

Earlier in the Day:

Economic data released through the Asian session this morning was on the lighter side, with key stats limited to October’s business PMI figure out of New Zealand.

For the Kiwi Dollar, the Business NZ PMI rose from a September 51.7 to 53.5 in October, the highest level since May.

  • The production (52.8) and new orders (56.7) sub-indexes both improved to their highest levels since May and April respectively.
  • Following a number of contractions through the year, the employment sub-index rose for a 2nd consecutive month to 52.4.
  • Sentiment also improved, with 58.3% of comments positive, supported by rising demand from overseas, while seasonal factors including weather and pre-Christmas season orders also supporting sentiment.

The Kiwi Dollar moved from $0.68307 to $0.68265 upon release of the figures before rising to $0.6836 at the time of writing, a gain of 0.09% for the session.

Elsewhere, the Japanese Yen was up 0.18% to ¥113.44 against the U.S Dollar, with the Aussie Dollar up 0.07% to $0.7282,

The Day Ahead:

For the EUR, stats are on the lighter side, with economic data scheduled for release later this morning being limited to finalized October inflation numbers out of the Eurozone.

Focus will be on the month-on-month headline figure and any revisions to prelim numbers, though we can expect more influence from the geo-political risk side, with the political environment unlikely to improve anytime soon.

At the time of writing, the EUR was up 0.12% to $1.1342.

For the Pound, there are no material stats scheduled for release, leaving the Pound in the hands of Brexit, with Dominic Raab’s resignation on Thursday having hit the Pound hard in the day, uncertainty and negative sentiment towards the chances of a deal being accepted by Parliament now weighing.

At the time of writing, the Pound was up 0.13% to $1.2790, with Brexit news the key driver through the day.

Across the Pond, economic data out of the U.S is limited to October industrial production figures that will provide some further guidance on which direction the U.S economy is heading going into the 4th quarter, upbeat numbers likely to give the Dollar a boost following FED Chair Powell’s positive outlook on the U.S economy that was somewhat caveated with a warning of possible negative fallout from weak overseas demand.

Outside the stats, the Oval Office will be ever present to provide direction, with the back and forth between the U.S and China on trade likely to garner some attention.

At the time of writing, the Dollar Spot Index was up 0.05% to 96.972, with today’s stats, Capitol Hill and geo-political risk in focus through the day.

For the Loonie, after a quiet week, stats scheduled for release later today include September manufacturing sales and foreign security purchases figures that will provide the Loonie with some direction, though we will expect market risk appetite and crude oil prices to have the final say, the Loonie having held up pretty well considering the slide in oil prices through the week.

The Loonie was down 0.08% to C$1.3168 against the U.S Dollar at the time of writing.

This article was originally posted on FX Empire

More From FXEMPIRE: