GBP at four-week high
Against a basket of other majors, Sterling's trading at around a four-week high, and above 1.30 versus the US Dollar as the week begins. On Friday the Pound strengthened against the US Dollar, bolstered by comments from Chancellor Rishi Sunak about further support for the labour market among the ongoing Covid fallout. In the week ahead, the Pound could be sensitive to Boris Johnson's unveiling of a three-tier lockdown system, and more conversations between the UK and EU on Brexit. Comments from Bank of England officials could also increase volatility after recent negative interest rate discussions.
European Central Bank officials in focus
The Euro had a relatively uneventful week last week, but could remain sensitive to increasing coronavirus cases, new lockdown measures across Europe, Brexit talks, and the upcoming US election which is impacting general market sentiment. German sentiment surveys will be out in the week ahead, as well as Eurozone Industrial Production data, and inflation stats. European Central Bank Chief Christine Lagarde will also speak today as the IMF-World Bank meeting begins. Over the weekend, ECB officials stated that more stimulus was needed to support the economy.
Countdown to the election
The US Dollar spent a second week declining last week as risk appetite favoured other assets. Markets are waiting to see what will happen with the election in just three short weeks, and negotiations surrounding a stimulus package, which could encourage risk appetite and potentially put further pressure on the US Dollar. If a Biden victory comes to fruition, markets are expecting further stimulus, so any polls which indicate a new President could enhance that shift further. In the week ahead, inflation data is due out for September as well as Retail Sales and manufacturing data.
AUD and NZD
Last week, the Australian and New Zealand Dollars reached three-week highs versus the US Dollar as the Buck weakened. Meanwhile, the Pound hit a four-week high versus the New Zealand Dollar. In the week ahead, the Westpac Australian Consumer Confidence stat could influence the Aussie Dollar on Tuesday, as well as labour market data released later in the week. The latest Reserve Bank of Australia meeting minutes will be closely examined when they're released in the very early hours of next Monday morning. RBA representatives are also scheduled to speak in the week ahead, which could encourage AUD movement. This week, New Zealanders will head to the polls for the latest General Election; however, polling has been mostly stable, and it's expected that current Prime Minister Jacinda Ardern will win once again, barring any surprises. Manufacturing and services data will also be released this week and could impact how the Kiwi trades.
The Canadian Dollar hit a four-week high versus the US Dollar last week as it began reversing September losses. Strong employment data from Canada also helped to boost the Loonie, alongside a rise in oil prices--Canada's largest commodity. Speeches from Bank of Canada representatives could influence the Canadian Dollar somewhat in the week ahead, as could employment data due out in the middle of the week.