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The EUR and the Pound Remain in the Spot Light as Geo-Political Risk Spikes

Bob Mason
Economic data is likely to have a relatively muted impact on the majors through the day, with heightened geo-political risk to drive the EUR and the GBP.

Earlier in the Day:

Economic data released through the Asian session this morning was on the lighter side once more, with key stats limited to October business confidence figures out of Australia.

For the Aussie Dollar, October’s NAB Business Confidence Index stood at 4, easing by 2 points from September’s 6.

  • The business conditions index also fell by 2 points to +12, with business conditions holding well above the average, while business confidence sits below the average.
  • October’s decline was attributed to the employment component

The Aussie Dollar moved from $0.71701 to $0.71736 upon release of the figures before rising to $0.7180 at the time of writing, a gain of 0.10% for the session.

Elsewhere, the Japanese Yen was up 0.11% to ¥113.71 against the U.S Dollar, with the Kiwi Dollar up 0.21% to $0.6724, the Kiwi Dollar finding support in spite of the risk off sentiment across the broader market, with the Asian equity markets on the slide following the overnight losses in the U.S.

The Day Ahead:

For the EUR, economic data includes finalized October inflation figures out of Germany that are unlikely to have a material impact on the EUR and November economic sentiment numbers out of Germany and the Eurozone, with influence hinged on the Italian Coalition government’s budget submission, which will remain the markets main area of focus.

The deadline is today and uncertainty has tanked the EUR over the last week, the EUR having fallen from $1.14 levels to $1.12 levels.

At the time of writing, the EUR was up 0.13% to $1.233, with noise from Italy and Brussels the key driver for the EUR through the day.

For the Pound, it’s a busier day on the data front, with key stats scheduled for release this morning including September’s wage growth and unemployment rate and October’s claimant count figures.

While the numbers traditionally have a material influence on the Pound, we can expect a relatively muted response this time around, with focus remaining on Brexit through the day, the Pound joining the EUR on a slide, with market jitters over a Brexit no deal weighing.

At the time of writing, the Pound was up 0.11% to $1.2863, with Brexit news the key driver through the day.

Across the Pond, there are no material stats scheduled for release, which leaves Capitol Hill as the key driver, while market sentiment towards Brexit and the Italian government could provide further support for the Dollar through the day should the wires deliver more bad news.

At the time of writing, the Dollar Spot Index was up 0.05% to 97.586, with Capitol Hill and geo-political risk in Europe remaining in focus through the day.

For the Loonie, with another quiet day on the economic calendar front, crude oil will continue to provide direction, with OPEC’s monthly report scheduled for release in the early afternoon.

The Loonie was up 0.09% to C$1.3235 against the U.S Dollar at the time of writing, with crude oil prices the key driver through the day.

This article was originally posted on FX Empire