Brexit continues to dominate as Theresa May holds on for another day

 

Pound - GBP 

Leadership challenges spook Sterling investors 

Last week was chaotic for Sterling, and the British currency dropped by almost 2.0% in a single session against the US Dollar (GBP/USD) and Euro (GBP/EUR). Brexit inspired sharp and swift market movements as Theresa May faced another potential leadership challenge and numerous resignations from Ministers over her Brexit proposal. This week, eyes will remain firmly on Brexit as Theresa May attempts to make some progress in the situation. Additionally, influential UK economic data is hard to find this week, leaving the Pound incredibly susceptible to Brexit-inspired market movement. That being said, Bank of England (BoE) Governor Mark Carney will testify in London on Tuesday which could create some GBP exchange rate movement. Early in the hours of Monday morning, the Rightmove House Prices figure for November was released, coming in at -0.2% on the year, following the previous 0.9% reading. 

Euro - EUR

Italian situation in focus

Last week the situation in Italy continued to raise eyebrows as both sides refused to budge. It’s possible this standoff could continue into the spring when European Parliament elections take place; it’s already expected anti-austerity parties could gain some favour. Meanwhile, inflation data helped the Euro gain some ground on Friday after the final October number came in at 2.2% on the year. On Wednesday this week, the Organisation for Economic Co-operation and Development (OECD) will release its Economic Outlook which may create some Euro exchange rate movement. Meanwhile, Thursday will see the Eurozone Consumer Confidence number make its way onto the market, as well as the European Central Bank’s (ECB) account of monetary policy from the October 25th meeting. Friday will see a raft of German and Eurozone ecostats published, including services, and manufacturing data. 

US Dollar - USD 

Safe-haven Dollar attracts spooked investors 

The US Dollar’s safe-haven status had a draw for investors last week as Brexit chaos ensued. The US Dollar may find itself supported in coming months as the Federal Reserve continues to hike interest rates amid rising wage pressures and robust economic growth. It’s not an overwhelming week ahead for US data, but there are some important numbers investors in the Dollar will be paying close attention to. Wednesday will see the highly influential Durable Goods Orders stat reach markets, while Friday will detail the productivity of the manufacturing and services sectors in November. When it comes to trade war tensions, markets will be looking towards the G20 summit in Argentina later this month for any news. 

Australian Dollar - AUD 

Australian labour market beats forecasts

Last week, the Australian labour market posted some positive numbers when the Unemployment Rate remained at 5.0% in October, rather than increasing to the forecast 5.1%. Additionally, the Employment Change stat hit 32.8K—significantly higher than the 20.0K forecast and the previous 7.8K reading. This week, Tuesday will be an interesting day for the Aussie Dollar when the Reserve Bank of Australia’s (RBA) meeting minutes reach markets, and RBA Governor Philip Lowe gives a speech in Melbourne. On Thursday, Australian services data will be out. 

New Zealand Dollar - NZD

House sales rebound

Last week data showed New Zealand manufacturing had taken an upswing in October; additionally, House Sales data also improved on the year from -3.0% to 15.5%. Overnight, the latest service sector index has been released, showing an upswing in productivity in October. Investors will also be looking towards Wednesday’s Credit Card Spending stats to gauge the health of the economy.

Canadian Dollar - CAD

Canadian inflation ahead

Last week Canadian economic data was thin on the ground, with only the Existing Home Sales number of note. The ecostat contracted by -1.6% on the month in October, a far cry from the -0.2% forecast and September’s -0.4%. It’s a quiet start to the week for Canadian data, but Friday will see the release of the October Consumer Price Index (CPI) which is expected to remain at 2.2% on the year. Retail Sales numbers will also be out, and economists are expecting a flat 0.0% reading in September after the previous month’s -0.1% contraction.