Find out how the major currencies have been performing and what movement we could see in the days ahead with our weekly exchange rate update.
EUR – Euro Gains despite Lagarde’s Warnings
The Euro enjoyed modest gains this week, with the single currency being bolstered by a drop in the US Dollar due to the negative correlation between the pairing. This allowed the Euro to advance in spite of comments from European Central Bank (ECB) President Christine Lagarde in which see warned that low inflation poses fundamental challenges to the ECB.
In focus for EUR investors next week will be the latest ZEW surveys from Germany, with the Euro potentially finding support if the uptrend in economic sentiment extended into October.
Top EUR data releases:
Oct 13 EUR ZEW Economic Sentiment (Oct)
Oct 14 EUR Industrial Production (Aug)
Oct 16 EUR Inflation Rate (Sep)
USD – US Dollar Rocked by Stimulus Headlines
The US Dollar has fallen back this week, with demand for the safe-haven currency dented as markets cheered Donald Trump’s discharge from hospital and hopes for a new stimulus package. However, Trump briefly upset the risk-on tone in mid-week trade after calling for a halt to stimulus talks with the Democrats, before reviving hopes by tweeting he would be open to some targeted spending measures.
Turning to next week’s session, we could see the US Dollar infused with fresh volatility as political uncertainty grows as we edge closer to the 2020 Presidential election.
Top USD data releases:
Oct 13 USD Inflation Rate (Sep)
Oct 15 USD Empire State Manufacturing Index (Sep)
Oct 15 USD Retail Sales (Sep)
GBP – Pound Fluctuates on Brexit Uncertainty
The Pound has traded in a wide range over the past week as a result of heightened Brexit uncertainty. While Reports suggest that positive progress is being made towards a deal, GBP investors fear some sticking points in talks are still hindering the chances of an agreement.
Looking ahead, this volatility in GBP exchange rates is only likely to become more pronounced in the coming week ahead of a self-imposed deadline, although there remains plenty of upside potential in Sterling if a deal can be found.
Top GBP data releases:
Oct 13 GBP Unemployment Rate (Aug)
Oct 13 GBP Wage Growth (Aug)
Oct 15 GBP Brexit Deal Deadline
AUD – Australian Dollar Struggles amid Shifting Market Sentiment
Trade in the Australian Dollar has been mixed over the past week as shifting market sentiment rocked the risk-sensitive ‘Aussie’. This was largely tied to uncertainty surrounding US stimulus talks, although a smaller-than-expected fiscal package from the Australian government failed to help matters.
In the spotlight for AUD investors next week will be Australia’s latest jobs report. Will another fall in unemployment help to bolster the Australian Dollar?
Top AUD data releases:
Oct 14 AUD Consumer Confidence (Oct)
Oct 15 AUD Unemployment Rate (Sep)
ZAR – Rand Dented on Mixed Risk Tone
The South African Rand also struggled to support itself this week as the emerging market currency was undermined by fluctuating market sentiment and mixed expectations over the next US stimulus package.
Looking ahead, ZAR exchange rates are likely to remain highly sensitive to market sentiment through next week’s session, although a positive retail sales report could offer some support to the Rand.
Top ZAR data releases:
Oct 12 ZAR Manufacturing Production (Aug)
Oct 14 ZAR Retail Sales (Aug)
CAD – Canadian Dollar Underpinned by Recovery in Oil Prices
The Canadian Dollar made some modest gains this week as the commodity linked currency was buoyed by an uptick in oil prices, which helped to offset a surprise fall in the Ivey PMI.
Turning to next week’s session, in the absence of any notable domestic data releases, CAD exchange rates are likely to remain highly sensitive to movements in oil prices.
ILS – Shekel Rallies on End of Lockdown Hopes
The Israeli Shekel shot higher this week, with the currency soaring on the back of hopes that the second lockdown will soon come to an end and that Israel’s economy will start to open back up.
Looking ahead, ILS investors are likely to keep a close eye on domestic coronavirus statistics as any flare ups could derail any plans to lift the lockdown.
Top ILS data releases:
Oct 15 ILS Inflation Rate (Sep)
Posted in Personal Resources on Oct 9 2020