Dollar registers seven consecutive weeks of declines
Employment and growth figures ahead
The Pound's been reaching pre-market crash ranges against the US Dollar, hitting interbank levels of 1.3186. In the coming weeks, Brexit will be a factor that could influence the Pound, as the UK attempts to make trade agreements with other nations. If the UK doesn't manage to organise tariffs with the US ahead of the November elections, there may be concerns that the UK's post-Brexit momentum could stutter, so markets will be watching developments there closely. This week, influential UK employment and wage data will be released, as well as growth figures later in the week. Both events could create Sterling market movement as well as general risk sentiment, coronavirus developments, and geopolitical events.
Eurozone growth stats in focus
The Euro has been trading against the US Dollar at its highest levels since May 2018 of late as broad-based USD weakness takes hold. Last week, a composite measure of EU output, tracking trends across services and manufacturing sectors, noted an increase to 54.9—the highest level in more than two years, as orders noted the first upswing in five months. In the week ahead, Eurozone growth rate data will be a talking point, as will Germany's inflation readings, industrial output numbers, and the latest German and Eurozone ZEW surveys.
Weaker across the board
Last week, US payrolls data showed a 1.8 million increase in July, beating expectations amid a coronavirus resurgence, while unemployment also fell. This follows two months of record-setting employment growth. The Dollar closed last week slightly higher but registered its seventh consecutive week of declines for the first time since 2010. It remains to be seen whether the Dollar weakness that's been evident in recent months is short-term and about to rebound, or whether it could last a little longer as coronavirus, economics, and politics hinder USD strength. Inflation data and retail numbers will be the main releases on the US economic calendar this week, but speeches from Federal Reserve officials could also create some Buck movement.
AUD and NZD
Monetary policy in focus
On Friday, the Aussie Dollar was given a boost by Australian services data which showed an increase in July. The Australian currency had rallied by around 1.5 cents at the beginning of the week, and reached the highest levels since February 2019 against the US Dollar on Friday morning, before softening following US data being released. In other news, the Reserve Bank of Australia published its Monetary Policy Statement and said it expected 2020 growth to decline by 3%, followed by a rebound of around 6% in 2021. The Australian Dollar might experience some movement on the back of Westpac's Consumer Confidence Index, due out in Wednesday's Oceanic session. Meanwhile, Thursday's trading will see the release of influential labour market data and a speech by RBA Governor Philip Lowe.
Meanwhile, the New Zealand Dollar has struggled since reaching its highest level against the US Dollar since the beginning of January on July 31st. The Reserve Bank of New Zealand's upcoming monetary policy decision on Wednesday may create some NZD exchange rate movement—particularly if its asset purchase programme changes or other monetary policy tools are implemented.
Light data week
Last week, the Canadian Dollar reached its highest level since February 2020 versus the US Dollar, having rallied by more than 10% since March. Economic data from Canada has been strong, showing manufacturing activity expansion, and a housing market recovery. Given the economic data and with oil prices still having the potential to climb further, the Canadian Dollar may have additional reasons to rise in future. It's a very light data week in terms of Canadian domestic ecostats, but the CAD exchange rate will still be susceptible to risk sentiment and commodity prices, as well as other global events.