Currency

The Week Ahead – Monetary Policy Puts the Aussie, the Pound, and the Greenback in the Spotlight

On the Macro

It’s a busy week ahead on the economic calendar, with 58 stats in focus in the week ending 5th November. In the week prior, 56 stats had been in focus.

For the Dollar:

Early in the week, manufacturing sector PMIs will draw interest. Expect the ISM survey data to be key, with employment and cost pressures likely to be the main areas of focus.

On Wednesday, ADP nonfarm employment change and service sector PMIs will influence.

Both the ADP and ISM Non-Manufacturing PMI figures will be key on the day.

On Thursday, initial jobless claims will provide direction ahead of nonfarm payrolls on Friday.

While the stats will influence, however, the FED monetary policy decision on Wednesday will be the main event… The markets have accepted a tapering but are hoping for policy on interest rates to remain unchanged.

In the week ending 29th October, the U.S Dollar Index rose by 0.51% to 94.123.

For the EUR:

It’s a busy week on the economic data front.

Early in the week, German retail sales and manufacturing PMIs will be in focus.

Barring revisions to prelim PMIs, expect the retail sales figures and Italy and the Eurozone’s PMIs to be key.

On Thursday, German factory orders and service sector PMIs will provide direction.

At the end of the week, German industrial production and Eurozone retail sales figures will also draw interest.

For the week, the EUR fell by 0.73% to $1.1558.

For the Pound:

It’s a relatively quiet week ahead on the economic calendar.

Finalized private sector PMIs for October will be in focus in the week.

Expect any revisions to the services PMI to be key.

On the monetary policy front, however, the BoE monetary policy decision will be the main event on Thursday.

The markets are expecting some votes in favor of a hike and for the BoE to prep the markets for an imminent rate hike. It could be a dovish one, however, with the BoE looking to curb inflation rather than respond to an overheating economy.

The Pound ended the week down by 0.53% to $1.3682.

For the Loonie:

It’s another relatively busy week ahead on the economic calendar. Trade data will be in focus on Thursday ahead of employment and Ivey PMI numbers on Friday.

Expect the trade and employment figures to be key.

The Loonie ended the week down 0.17% to C$1.2388 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

Manufacturing data will be in focus on Monday ahead of trade data on Thursday.

Expect the trade data to have the greatest influence in the week.

On the monetary policy front, however, the RBA monetary policy decision and rate statement will be the key drivers. With the markets expecting the RBA to stand pat, the economic outlook and forward guidance will be key.

At the end of the week, the RBA’s monetary policy statement will also draw interest.

The Aussie Dollar ended the week up by 0.70% to $0.7518.

For the Kiwi Dollar:

It’s another quiet week ahead.

On Tuesday, building consents will be in focus ahead of employment figures on Wednesday, which will be key.

From the RBNZ, the Financial Stability Report will also influence on Wednesday, however.

The Kiwi Dollar ended the week up by 0.20% to $0.7171.

For the Japanese Yen:

Finalized private sector PMIs for October and household spending will be in focus in the week.

Barring marked revisions from prelim figures, expect household spending to have a greater impact.

The Japanese Yen fell by 0.40% to ¥113.950 against the U.S Dollar.

Out of China

It’s a relatively busy week ahead on the economic calendar.

Private sector PMIs for October will influence market risk sentiment in the week.

NBS numbers are due out early Sunday ahead of the all-important Caixin Manufacturing PMI on Monday.

On Wednesday, the Caixin Services PMI will also draw interest, however.

The Chinese Yuan ended the week down by 0.32% to CNY6.4056 against the U.S Dollar.

Geo-Politics

Nothing new to consider in the week ahead, with China and Capitol Hill continuing to be the key areas of focus.