U.S Politics and Nonfarm Payrolls and Brexit Keep the Dollar and the Pound in Focus

Earlier in the Day:

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

For the Japanese Yen

Household spending figures were in focus early this morning.

According to the Statistic Bureau, household spending increased by 3.8% in September, following a 1.7% rise in August. Economists had forecast a 2.2% rise. Year-on-year, household spending was down by 10.2, however, following a 6.9% fall in August. Economists had forecast a 10.7% slide.

The Japanese Yen moved from ¥103.671 to ¥103.654 upon release of the figures. At the time of writing, the Japanese Yen was flat at ¥103.49 against the U.S Dollar.

For the Aussie Dollar

The RBA Statement on Monetary Policy was in focus, following the RBA’s monetary policy easing on Tuesday.

• Economic conditions continue to be driven by the COVID-19 pandemic and the responses to it.
• As previously noted by the RBA, the economy was likely to perform better than had previously been anticipated.
• Any recovery would likely be a bumpy one, however.
• The RBA revised upwards its economic forecasts for 2020 from -6% in August to -4%.
• An upward revision to household consumption, from -7% to -5%, for the year, supported the revised outlook for consumption.
• Business investment was also revised upwards from -17% to -14%.
• On the inflation front, consumer prices are projected to rise by 0.5% for 2020, revised up from a 1.5% decline.
• The outlook towards unemployment also improved, with unemployment expected to peak at 8% as opposed to 10%.

The Aussie Dollar moved from $0.72674 to $0.72621 upon release of the statement. At the time of writing, the Aussie Dollar was down by 0.33% to $0.7259.

For the Kiwi Dollar

Quarterly inflation figures drew some attention ahead of next week’s RBNZ monetary policy decision.

Inflation expectations for 2-years out improved from 1.43% to 1.59%, following on from a pickup from 1.24% to 1.43% in the 3^rd quarter. Inflation expectations had stood at 1.80% back in the December quarter of 2019.

According to the RBNZ’s survey of expectations,

Inflation expectations for 1-year out also improved, rising from 1.03% to 1.23%. In the 3^rd quarter, inflation expectations for 1-year out had picked up 0.74% to 1.03%.

The Kiwi Dollar moved from $0.67818 to $0.67805 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.19% to $0.6777.

The Day Ahead:

For the EUR

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

Key stats include German industrial production figures for September and 3^rd quarter nonfarm payrolls from France.

Following better than expected survey-based data from Germany for October, the markets will be looking for a pickup in industrial production.

Away from the economic calendar, Brexit, COVID-19, and U.S politics will remain key drivers.

At the time of writing, the EUR was down by 0.02% to $1.1824.

For the Pound

It’s a quiet day ahead on the economic calendar. October house price figures are due out later today that will likely have a muted impact on the Pound.

Expect updates on Brexit and U.S politics to be the key drivers, as Englan goes back into lockdown.

At the time of writing, the Pound was down by 0.11% to $1.3133.

Across the Pond

It’s a busy day ahead for the U.S Dollar. Key stats include October’s nonfarm payrolls and the unemployment rate.

Wage growth, also due out, will likely have a muted impact on the day.

Away from the economic calendar, U.S politics will continue to influence.

At the time of writing, the Dollar Spot Index was up by 0.12% to 92.632.

For the Loonie

It’s a busier day on the economic data front. October employment figures and Ivey PMI are due out later today.

Expect the employment numbers to be the key driver on the data front.

Away from the economic calendar, U.S politics and COVID-19 will remain key drivers, however.

At the time of writing, the Loonie was down by 0.27% to C$1.3080 against the U.S Dollar.

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