Holding gains, for now

GBP

Holding gains, for now

The Pound has gained against some other currency majors following the release of the Autumn Statement by Chancellor Jeremy Hunt. The new Chancellor has implemented some more prudent fiscal measures to keep the public finances on track in hopes of dealing with the current deficit and economic environment. However, while the Pound is holding onto gains against the US Dollar, Brexit is back in the spotlight, and that could be a factor that creates volatility for Sterling. In the week ahead, manufacturing and services data will be released. Furthermore, Jeremy Hunt will be testifying on his Autumn Statement, and Bank of England Monetary Policy Committee members will speak throughout the week.

EUR

Meeting minutes ahead

The Euro could be impacted by concerns of a winter Eurozone recession as inflation continues to bite and demand slows. Some analysts have suggested that demand is waning following on from rate hikes by the ECB, with some forecasts for a 0.5% contraction in growth in the final quarter of 2022. In the week ahead, manufacturing and services stats will be released. The European Central Bank will also release its latest meeting minutes from its October meeting, which may offer some clues on the path of monetary policy from policymakers. 

USD

Smaller rate hikes

The Dollar has softened of late, after the Dollar Index reached multi-decade highs at the end of October. Questions around the Federal Reserve are beginning to feed through to markets, as many wonder if policymakers will still continue with their hawkish path or pull back to a more dovish tone. Some Fed policymakers have voiced their preference for smaller interest rate hikes at future meetings - these expectations could continue to influence how the US Dollar trades. In the week ahead, manufacturing data will be out, as well as services stats. Meanwhile, October's highly influential Durable Goods Orders figure will reach markets. Additionally, Fed monetary policy figures will speak throughout the week and could create further US Dollar volatility. 

AUD and NZD

Aussie employment jumps

The Pound has made slight gains against the Australian Dollar but softened slightly versus the New Zealand Dollar in the past week. Australian employment climbed by more than markets had expected in October, after a fall in September. However, the strong labour market stat is unlikely to deter the Reserve Bank of Australia from its tightening cycle and the expected next interest rate hike in December. RBA Governor Lowe will speak this week, and Australian services and manufacturing stats will be released. Meanwhile, the Reserve Bank of New Zealand will announce its latest Official Cash Rate on Wednesday, with expectations for another hike, this time from 3.50% to 4.25%. 

CAD

One of the worst performers

The Pound's been able to gain versus the Canadian Dollar of late, as the Loonie edged lower and became one of the worst-performing G10 currencies. The Canadian Dollar dipped as crude oil prices fell, as oil is Canada's most lucrative export. This week's main Canadian data event will be the Canadian Retail Sales stat. Additionally, any price changes to oil will likely feed through to the Canadian Dollar's value.  

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