Pound hits a 20-month high, can it maintain gains with tomorrow’s political developments?
Pound - GBP
Sterling hits highs
Last week the Pound hit fresh three-month highs against the US Dollar, while achieving 20-month highs against the Euro. The move higher in Sterling came as Brexit sentiment increased, and the likelihood of a no-deal exit seemed to diminish. It might be a quiet start to the week in terms of economic data, but Bank of England (BoE) representatives are scheduled to speak on Monday which could provide Sterling with some direction. However, one of the most influential events of the week is forecast to be Tuesday’s parliamentary developments. Sterling is expected to be particularly volatile; if an amendment to rule out a no-deal exit passes, the Pound could rise. However, any further uncertainty over the situation could weigh on the British currency. UK Consumer Confidence and manufacturing data will also be out later in the week.
Euro - EUR
Eurozone growth numbers ahead
The Euro managed to record some rapid gains against the US Dollar on Friday evening, but has struggled to retain them as this week begins. After some disappointing German business confidence readings last week, expectations for data this week have been a little dampened. German inflation data will be out on Wednesday, followed by German labour market numbers on Thursday. The Eurozone will also reveal its latest growth figures on Thursday, followed by the currency bloc’s inflation levels on Friday. Any lacklustre readings could put more pressure on the Euro.
US Dollar - USD
Government shutdown granted some relief
The US Dollar was able to gain against several currencies towards the end of last week on political progress with China; USD/EUR was offered some additional support after the Euro softened on weaker domestic data. With around 800,000 US federal workers not receiving paychecks due to the partial government shutdown, it’s likely some of the impact will be shown in upcoming ecostats. However, a plethora of figures could be delayed as a result of the shutdown, including Durable Goods Orders, Factory Orders, and New Home Sales readings. Meanwhile, US President Donald Trump suggested that he thought a trade deal with China over trade could happen, but denied that he was considering lifting tariffs.
Australian Dollar - AUD
Australian inflation numbers ahead
For a lot of last week, the Australian Dollar found itself softening as news regarding US and China trade tensions circulated. When US Commerce Secretary Wilbur Ross stated the two nations were ‘miles and miles’ away from reaching a trade truce, the Aussie declined. The Australian currency had already been pressured lower by speculation that the Reserve Bank of Australia (RBA) may have to look at making an interest rate cut. However, the Australian currency managed to reclaim some ground as risk sentiment rose by the end of the week. There are a few pieces of economic data to emerge from Australia this week, including the December Business Confidence figure on Tuesday, and the fourth quarter inflation figure on Wednesday. Consumer prices are expected to fall, which might put some pressure on the Aussie Dollar.
New Zealand Dollar - NZD
Kiwi Dollar climbs on risk sentiment
The New Zealand Dollar was another currency able to climb against the US Dollar and other currency majors last week as risk-sentiment edged up on news that the partial government shutdown had been granted a temporary reprieve. New Zealand economic data is thin on the ground this week, but New Zealand Trade Balance, Imports, and Exports stats will be revealed in Tuesday’s Oceanic session, followed by Consumer Confidence levels in Friday’s trading.
Canadian Dollar - CAD
Canadian growth concerns in focus
Figures last week showed Canadian Retail Sales data came in at -0.9% in November, while October’s figure was revised lower to +0.2%, prompting fears about economic growth in the nation. However, the Canadian Dollar hit a two-week high against the US Dollar on Friday as the Greenback weakened and oil prices climbed. Political developments in Venezuela have threatened to lessen the supply of crude oil, offering the commodity some support. Thursday will detail the level of growth in Canada in November; expectations are for a fall on the year from 2.2% to 1.6%. Meanwhile, manufacturing figures will be out on Friday.