Pound run falters, Aussie and Kiwi strengthen
Final week of trade agreement talks
Last week, the Pound ended its recent run of gains, struggling to break through the 1.34 interbank level against the US Dollar and dropping below the 1.12 figure versus the Euro. Moving forward, Sterling will likely be sensitive to Brexit developments, especially with the 4th December approaching, which is supposedly the last day for trade agreement talks to conclude. This week, the main data to be released will be Markit's November Purchasing Managers' Indexes. These will indicate the health of the manufacturing, construction, and services sectors. Any reading over 50.0 indicates growth, whereas below suggests contraction in the sector. Manufacturing is expected to increase to 55.2 from 53.7 in October, services are forecast to decline from 51.4 to 45.8, and construction is predicted to come in at 52.0 down from the previous month's 53.1.
Eurozone inflation data ahead
Against a host of other majors, the Euro climbed by 1.0% last week, approaching the 1.20 level against the US Dollar. Today, the Eurogroup video conference will take place, as well as a speech by ECB President Christine Lagarde. As the week continues, Eurozone inflation rate data will be released, as well as employment data from the Eurozone's largest economy, Germany. Eurozone manufacturing and Retail Sales stats will also make their way onto the market.
Lowest level since April 2018
US Dollar weakness continued last week, with the USD trade-weighted index hitting its lowest level since April 2018. Federal Reserve Chief Jerome Powell could have some influence on the US Dollar this week with speeches scheduled amid some high-tier economic data. The figures are expected to show a rebounding US economy—despite a worsening covid situation. Some of the most influential stats will be manufacturing data out on Tuesday, and the highly-anticipated Non-Farm Payrolls and Unemployment Rate figures.
AUD and NZD
Kiwi on course for strongest month since 2013
Last week, the Australian Dollar hit 12-week highs versus the US Dollar after news that China's industrial firms grew in October for the sixth month in a row and at their fastest levels since the start of 2017. Meanwhile, the New Zealand Dollar hit its most substantial level in more than three years. The New Zealand Dollar has been on track to gain over 6.0% in November—the strongest monthly gain since 2013. However, the Trans-Tasman currencies have come under pressure following the Trump Administration adding two Chinese firms to its defence blacklist. Investors will be watching to see how geopolitical events unfold. This week, the Reserve Bank of Australia will announce its latest interest rate decision—which is expected to show rates on hold—and there will be a speech by Governor Philip Lowe. Additionally, Australian growth rate numbers will be released, as well as services and manufacturing data. In New Zealand, the Global Dairy Trade Price Index, Building Permits, Imports, and Exports numbers, will all be released.
Canadian growth data ahead
At the start of last week, the Pound managed to reach 11-week highs versus the Canadian Dollar as Brexit trade deal hopes buoyed the British currency. Meanwhile, climbing oil prices offered the Loonie some support as the week got underway, but as sessions went on, the price of Canada's largest export slipped from seven-month highs. In the week ahead, Canadian growth data is scheduled for release, with expectations for an increase of 47.0% in the third quarter of the year, up from the previous 38.7% reading. Additionally, Employment Change and Unemployment Rate data will be released, which could also have significant sway on the Loonie's trading range.