UK Data and Geopolitics Put the GBP, the EUR and the Dollar in Focus

While geopolitical risk will continue to influence the majors, it’s a busy day on the economic calendar for the Pound…
Bob Mason
Currency exchange notice board

Earlier in the Day:

It was a relatively quiet day on the economic calendar through the Asian session this morning.

Key stats were limited to October electronic card retail sales figures out of New Zealand.

Outside of the numbers, negative sentiment towards Phase 1 of the U.S – China trade agreement tested risk appetite early on.

For the Kiwi Dollar

Electronic card retail sales fell by 0.6% in October, reversing a 0.4% rise in September. According to NZ Stats, there was not only a fall in spending on more lasting goods but also a decline in day-to-day spending on food and drinks.

  • Spending fell across 4 of the 6 retail industries, with durables seeing the largest decline.
  • Spending on hardware, appliances, department stores, and pharmaceuticals (durables) fell by 0.8%, with spending on groceries and liquor (consumables) down by 0.5%.

At the time of writing, the Kiwi Dollar was up by 0.19% to $0.6340. The Kiwi found early support as the markets pared back expectations of a rate cut this Wednesday.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.13% to ¥109.12 against the U.S Dollar, while the Aussie Dollar was down by 0.19% to $0.6850.

The Day Ahead:

For the EUR

It’s a quiet day ahead on the economic calendar. There are no material stats due out of the Eurozone to provide the EUR with direction on the day.

The lack of stats will leave the EUR in the hands of geopolitical risk, with Spain, the UK and trade war chatter in focus at the start of the week.

A jump in support for the far-right VOX party left the Socialist Party short of a majority on the weekend and Spain with an even more fragmented political landscape.

While expectations are that the left will form a government albeit with smaller parties, Spain has joined the far-right wave that has swept across the EU.

At the time of writing, the EUR was up by 0.02% to $1.1020.

For the Pound

It’s a busy day ahead on the data front. Key stats include 3rd quarter GDP numbers and October manufacturing production figures. Trade data and industrial production figures are also due out but will likely have less impact on the Pound.

Following last week’s BoE monetary policy decision and 2 votes in favor of a rate cut, we can expect the Pound to be particularly sensitive to the numbers.

On the geopolitical risk front, UK politics will continue to grip the Pound. The 5-week general election campaign is underway, with the polls continuing to show the Tories out in front. According to the YouGov poll of polls, the Conservatives have 39% of the vote, well ahead of the Opposition Party’s 26%.

At the time of writing, the Pound was up by 0.10% to $1.2787.

Across the Pond

It’s a quiet start to the week on the economic calendar. There are no material stats due out of the U.S to provide the Greenback with direction.

The lack of stats will leave the Dollar in the hands of geopolitics throughout the day. Expect any further chatter on trade to have the greatest impact, with any negative chatter likely to weigh on the Dollar.

The Dollar Spot Index was up by 0.02% to 98.368 at the time of writing.

For the Loonie

It’s also a quiet day on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk appetite on the day, with the markets focused on trade.

Following last week’s stats, sentiment towards trade would need to materially improve to support crude oil prices and the Loonie. In the early part of this morning, negative sentiment towards trade weighed on crude. Brent and WTI were down by 0.78% and by 0.73% respectively.

The Loonie was down by 0.02% to C$1.3231, against the U.S Dollar, at the time of writing.

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