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Pound strengthens on optimism, high-tier data ahead

Renewed concerns for a slow down

Data last week showed a slowdown in UK business activity in October, increasing concerns there could be a renewed downturn in the final quarter of the year. Meanwhile, optimism that the EU and UK could reach a Brexit agreement has helped Sterling as both sides recommitted to talks. Additionally, the Oxford University trials for a coronavirus vaccine showed positive results, which also supported the Pound. It's a quiet end to the month for the UK in terms of economic data, but a few moderately important data releases will be out, including mortgage and house price numbers.

Preparing markets 

Against the US Dollar, the Euro has been caught in a broad range since July, trading between levels of 1.16 and 1.20. However, in the week ahead, the European Central Bank will meet and comments could determine the fate of the Euro in the coming months. It's expected ECB President Christine Lagarde will prepare markets for further policy easing in the coming months. This development has the potential to weaken EUR/USD as well as other Euro currency pairs. Other high-importance events this week will include inflation and growth data releases.

High-tier data ahead

The US Dollar weakened against the Pound last week, and the Buck softened against some other currency majors as it continued to give up recent gains. In the week ahead, high-tier Durable Goods Orders, GDP Growth Rate, inflation, and Consumer Confidence data will be released, meaning it could be an interesting week for US Dollar movement as markets assess how the world’s largest economy is performing.

Aussie under pressure

The Australian Dollar came under pressure last week, with both the Pound and Euro reaching their highest levels against the Aussie since May. Meanwhile, the New Zealand Dollar was little changed following disappointing Kiwi inflation data. In the week ahead, New Zealand trade balance data will be released as well as business and consumer confidence stats. Meanwhile, high-tier Australian inflation rate data will also be published. Both Aussie and Kiwi Dollars will also be susceptible to geopolitical developments and market risk sentiment.

Lack of power leaves CAD susceptible

The Canadian Dollar has been strengthening throughout October but had a couple of shaky sessions last week. With little significant data out for release in the rest of the month, the Canadian Dollar might be susceptible to movement in coming sessions. In the week ahead, the Bank of Canada will make its latest interest rate announcement, although it's unlikely the central bank will make any changes to its monetary policy given its current outlook. Additionally, monthly growth data and weekly earnings figures will also be released.