Geopolitics, the BoE, and the FED Put the Pound and the Dollar in the Spotlight

Earlier in the Day:

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

For the Aussie Dollar

September trade figures were in focus in the early part of the day.

The trade surplus widened from A$2.620bn to A$5.630 in September. Economists had forecast a narrowing to A$2.100bn.

According to the ABS,

• Exports of goods and services increased by A$1,265m (4%) to A$33,737m.
  • Non-monetary gold exports jumped by A$989m (72%), with net exports of goods under merchanting rising by A$2m (13%).
  • There were also increases in the exports of non-rural goods (1%) and services (2%).
  • Exports of rural goods fell by A$50m (2%), however.
• Imports of goods and services fell A$1,747m (6%) to A$28,108m.
  • Non-monetary gold imports slid by A$504m (42%), with imports of consumption goods falling by A$358m (4%).
  • Imports of intermediate and other merchandise goods fell A$629m (7%), with the imports of capital goods falling A$199m (3%).
  • The imports of services fell by A$59m (2%).

The Aussie Dollar moved from $0.71838 to $0.71799 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.17% to $0.7170.

For the Japanese Yen

October’s finalized PMI came in at 47.7, which was up from a prelim 46.6 and September 46.9.

According to the October Markit Survey,

• The latest decline in output was the softest in the current sequence of contraction as COVID-19 restrictions eased.
• New business also fell at a more modest pace in October. Foreign demand continued to decline as a result of ongoing restrictions stemming from the 2^nd wave of the pandemic.
• Employment levels steadied.
• While employment levels remained unchanged from September, outstanding business fell further in October.
• Sentiment towards the next 12-months remained positive, with optimism reaching its highest level since January 2018.

The Japanese Yen moved from ¥104.29 to ¥104.31 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.20% ¥104.31 against the U.S Dollar.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.07% to $0.6690.

The Day Ahead:

For the EUR

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

Key stats include German factory orders and construction data, along with Eurozone retail sales figures.

Expect German factory orders and Eurozone retail sales figures to be the key driver.

Away from the economic calendar, updates on Brexit, COVID-19, and the U.S Presidential Election will remain key drivers.

At the time of writing, the EUR was down by 0.03% to $1.1722.

For the Pound

It’s also a relatively quiet day ahead on the economic calendar. October’s construction PMI is due out later today. We don’t expect any influence from the numbers.

The main event of the day is the Bank of England’s monetary policy decision.

Brexit talks and updates from the U.S on the 46^th Presidential Election will also be key drivers on the day.

The markets are expecting updates on Brexit talks as Trump calls for recounts and judicial decisions to try to swing the balance in his favor.

At the time of writing, the Pound was down by 0.26% to $1.2954.

Across the Pond

It’s a relatively quiet day ahead for the U.S Dollar. Key stats include the weekly jobless claims and nonfarm productivity and unit labor cost figures for the 3^rd quarter.

The focus will remain on the weekly jobless claims figures. Ultimately, however, updates from the U.S on the Presidential Election will remain a key driver.

On the monetary policy front, the FED is also in action late in the day. With a lack of progress towards a stimulus package before the election, will the FED promise more?

At the time of writing, the Dollar Spot Index was up by 0.08% to 93.478.

For the Loonie

It’s another quiet day on the economic data front, with no material stats to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk sentiment and crude oil prices.

At the time of writing, the Loonie was down by 0.22% to C$1.3165 against the U.S Dollar.

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