Jackson Hole Economic Policy Symposium in focus
Brexit talks go nowhere
Last week, the Pound broke above the 1.32 interbank level versus the US Dollar, while also reaching above the 1.11 mark against the Euro, but closed the week in the range of 1.31 and 1.11 respectively. In terms of Brexit, little progress appears to have been made which has done little to support the Pound. Meanwhile, it's a quiet week ahead for UK domestic data, but house price data will be released on Friday, and Bank of England Governor Andrew Bailey will be speaking at the annual Jackson Hole Economic Policy Symposium on Friday. This event could create some market movement with so many influential figures due to speak.
Hitting new highs
The Euro registered fresh highs against the US Dollar last week in the interbank region of 1.19, before slipping below 1.18 as the week came to a close. This week, growth data for major Eurozone economies such as France and Germany will be in focus, as well as German sentiment surveys. Additionally, European Central Bank Chief Economist Philip Lane will be making a speech at the Jackson hole event, and a lot of market focus will be there.
Busy US data week ahead
Against a basket of other major currencies, the US Dollar has been trading at new lows this month. The somewhat unsteady economic recovery in the US, upcoming political uncertainty, and rising coronavirus cases, have failed to support the Buck. The week ahead is a busy one for the US Dollar with a host of economic data out, such as growth, labour market, spending, sentiment, and orders. In addition, Federal Reserve Chairman Jerome Powell will be speaking at the Jackson Hole event, which could create further volatility for the US currency.
AUD and NZD
RBA comments boost Aussie
Last week, the Reserve Bank of Australia released its latest meeting minutes, showing that board members believed the worst of the global growth contraction spurred by the coronavirus had passed. The central bank highlighted that there was still a considerable amount of uncertainty, but that it wasn't considering adjusting its monetary policy to be more accommodative given that the measures it has in place were working 'broadly as expected'. The New Zealand Dollar has been under some pressure as coronavirus cases rise again, and some domestic data such as credit card spending, disappointed.
It's a relatively quiet week ahead in terms of domestic data, but there are a few stats which could be of influence. China, Australia and New Zealand's largest trading partner, will release its latest manufacturing activity data on Monday 31st, a day when UK markets are closed for the bank holiday. A positive reading here could boost the Oceanic currencies. Global developments and commodity prices could also influence the AUD and NZD exchange rates.
Lower for longer
Canadian inflation data printed below forecasts last week, solidifying suspicions that the Bank of Canada may need to keep interest rates lower for longer. On Friday, the Canadian Dollar softened against the US Dollar after oil prices noted a decline and Canadian Retail Sales data fell in line with forecasts. Despite the fallback against the US Dollar on Friday, the Loonie registered its third week of advances against the Buck. In the week ahead, Canadian growth data will be out, as well as wage numbers and building figures. Comments from Bank of Canada policymakers and any variation in oil prices could also influence the CAD exchange rate.