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Stats and UK Parliament Put the USD and GBP in Focus

Bob Mason

Earlier in the Day:

It was a relatively quiet day on the economic calendar through the Asian session this morning.

October inflation figures out of Japan were in focus in the early part of the session.

Outside of the numbers, the EU’s approval of the Brexit extension to 31st January supported risk appetite at the start of the day. News from the U.S President on Monday of an imminent trade deal with China also supported riskier assets.

For the Japanese Yen

Tokyo’s core annual rate of inflation held steady at 0.5%in October, which was worse than a forecast of 0.7%. According to consumer price figures released by the Ministry of Internal Affairs and Communication,

  • Prices for culture and recreation (+2.2%), furniture and household goods (+1.8%), and clothes and footwear (+1.7%) provided support.
  • There were also increases in prices for medical care (+1.0%) and housing (+0.6%).
  • Pinning inflation back, however, was a 6.1% slide in prices for education and a 1% fall in prices for fuel, light, and water charges.
  • Prices for transportation and communication fell by 0.4%.

The Japanese Yen moved from ¥108.971 to ¥108.967 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.02% to ¥108.97 against the U.S Dollar.

Elsewhere

At the time of writing, the Aussie Dollar was up by 0.18% to $0.6850, with the Kiwi Dollar up by 0.38% to $0.6374. The pair found early support from the latest update on trade from the U.S.

The Day Ahead:

For the EUR

It’s another quiet day ahead on the economic calendar, with no material stats due out of the Eurozone to provide direction later today.

A lack of stats leaves the market focus on geopolitics.

On the Brexit front, focus now shifts to the UK Parliament. Boris Johnson failed to force a 12th December election, which does raise more uncertainty over what lies ahead.

While the EU has continued to support extensions, a relatively rigid stance in Brexit negotiations could fall foul of the British electorate…

The hope is, of course, that Brexit is reversed. That would certainly be EUR positive.

At the time of writing, the EUR was flat at $1.1100.

For the Pound

It’s another quiet day ahead on the data front. There are no material stats due out of the UK to provide the Pound with direction.

A lack of stats leaves the Pound in the hands of the UK Parliament through the latter part of the day.

Through the initial part of the day, we can expect market reaction to Parliament’s votes on when to hold a general election.

The Labour Party will be looking to prevent a general election but, with the SNP and Lib Dems also looking to call a general election, December may well be a decisive month for Britain.

At the time of writing, the Pound was down by 0.11% to $1.2849.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. September pending home sales, August house price figures and the all-important CB Consumer Confidence figures for October are due out.

While pending home sales will influence, consumer confidence figures will have the greatest impact on the Dollar on the day.

With consumer confidence in the Eurozone waning, a pickup in consumer confidence would deliver Dollar support.

As the markets look ahead to the FED and its October monetary policy decision tomorrow, any upside could be limited.

On the geopolitical front, Brexit news and chatter on trade will continue to influence.

The Dollar Spot Index was down 0.01% to 97.757 at the time of writing.

For the Loonie

It’s yet another quiet day on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk appetite throughout the day.

The Loonie was up by 0.02% to C$1.3053, against the U.S Dollar, at the time of writing.

This article was originally posted on FX Empire

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