Brexit and Inflation Figures Put the Pound in the Spotlight

Earlier in the Day:

It’s was a busy start to the day on the economic calendar this morning. The Kiwi Dollar, Japanese Yen, and the Aussie Dollar were in action in the early part of the day.

For the Kiwi Dollar

In the 3^rd quarter, the producer price input index rose by 0.6%, partially reversing a 1% decline from the 2^nd quarter.

According to NZ Stats,

• In the 3-months to September, prices received by producers fell by 0.3%, while prices paid bounced back.
• Prices paid for rent and fuel were on the rise in the 3^rd quarter. Petrol and diesel prices increased by 7.0% and by 9.2% respectively.

The Kiwi Dollar moved from $0.68945 to $0.68912 upon release of the figures. At the time of writing, the Kiwi Dollar down by 0.20% to $0.6877.

For the Japanese Yen

The trade surplus widened from ¥687.8bn to ¥872.9bn in October. Economists had forecasted a narrowing to ¥250.0bn.

According to figures released by the  Ministry of Finance,

• Year-on-year, exports fell by 0.2% to ¥6,566,069m.
  • Exports to China jumped by 10.2%, supporting a 4.4% increase in exports to Asia.
  • The 2^nd wave of the COVID-19 pandemic weighed on demand from Europe, however, with exports falling by 7.9%. France (-20.2%) and the UK (-22.8%) weighed on demand.
  • To the U.S, exports rose by a modest 2.5%.
• Imports slid by 13.3% to ¥5,693,170m.
  • Imports from China fell by 3.7%, with imports from Australia sliding by 26.3%.
  • From the U.S, imports fell by 15.6%, with imports from Europe declining by 10.8%.

The Japanese Yen moved from ¥104.175 to ¥104.122 upon release of the figures. At the time of writing, the Japanese Yen up by 0.05% to ¥104.14 against the U.S Dollar.

For the Aussie Dollar

Wages grew by just 0.1% in the 3^rd quarter, following a 0.2% rise in the 2^nd quarter. Economists had forecast a 0.2% rise.

The Aussie Dollar moved from $0.72850 to $0.72742 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.36% to $0.7275.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Finalized October inflation figures for the Eurozone are due out later today.

With the ECB set to deliver next month, the stats are unlikely to have a material impact on the EUR, however.

With Brexit negotiations reaching the final day of talks, updates from Brexit will influence. COVID-19 news will also provide direction, however.

At the time of writing, the EUR was down by 0.08% to $1.1853.

For the Pound

It’s also a relatively quiet day ahead on the economic calendar. October inflation figures are due out later this morning.

With the BoE ready to drop rates into negative territory, the annual rate of inflation and wholesale inflation will be the key drivers.

The stats are unlikely to have a material impact on the Pound, however. With the EU Summit tomorrow, it’s all about Brexit. Optimism and hopes of a trade agreement have continued to support the Pound…

At the time of writing, the Pound was flat at $1.3246.

Across the Pond

It’s a relatively busy day ahead for the U.S Dollar. October building permits and housing starts are due out later today.

With mortgage rates at close to record lows, the numbers are unlikely to provide the U.S Dollar with direction.

Expect U.S politics and COVID-19 news updates to be the key drivers on the day.

At the time of writing, the Dollar Spot Index was up by 0.09% to 92.503.

For the Loonie

It’s a relatively busy day on the economic data front. October inflation figures are due out later today. Expect Loonie sensitivity to the numbers.

Market risk sentiment and COVID-19 news updates will also influence throughout the day.

At the time of writing, the Loonie was down by 0.08% to C$1.3115 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.