UK: Weekly FX Market Update 17 November

GBP

• UK GDP is flatlining as the budget approaches, though GBPUSD continues to trade above 1.3000.

• The Financial Times reports that the Chancellor’s previously proposed income tax hike has been ruled out. Will the almost constant change around the budget damage confidence in the UK government even more?

• With UK CPI and Retail sales data due for release this week, will the results have an impact on the pound?

EUR

• When compared to the US, the Eurozone can be described as an oasis of calm.

• Quarterly GDP grew by 0.2% as expected, while the September trade balance was a healthy €19.4 billion.

• Will the recent EURUSD strength continue?

USD

• After the longest government shutdown in history finishes the USD declines. This is despite FOMC members becoming more hawkish about US inflation.

• FOMC meeting minutes are released on Wednesday, and with the US government now reopened, the important looking US jobs data is scheduled for release on Thursday.

• Flash Manufacturing and Services PMI on Friday could also give market direction to end the week.

Main events for this week:

Mon Nov 17

13:20 GBP MPC Mann Speaks

13:30 CAD CPI

13:30 USD Empire State Manufacturing Index

14:00 USD FOMC Williams Speaks

14:30 USD FOMC Jefferson Speaks

15:00 USD Construction Spending (Tentative)

20:35 USD FOMC Waller Speaks

Tue Nov 18

13:00 GBP MPC Pill Speaks

13:30 USD Industrial Production (Tentative)

17:00 GBP MPC Dhingra Speaks

Wed Nov 19

07:00 GBP CPI

10:00 EUR Final CPI

13:30 USD Building Permits/Housing Starts (Tentative)

17:45 USD FOMC Barkin Speaks

19:00 USD FOMC Meeting Minutes

Thu Nov 20

13:30 USD Non-Farm Payrolls/Average Hourly Earnings/Unemployment Rate/Unemployment Claims (Tentative)

13:45 USD FOMC Hammack Speaks

15:00 EUR Consumer Confidence

16:00 USD FOMC Cook Speaks

18:30 GBP MPC Dhingra Speaks

18:40 USD FOMC Goolsbee Speaks

Fri Nov 21

07:00 GBP Retail Sales

08:30 EUR ECB President Lagarde Speaks

09:00 EUR Flash Manufacturing & Services PMI

09:30 GBP Flash Manufacturing & Services PMI

12:30 USD FOMC Williams Speaks

14:00 USD FOMC Logan Speaks

14:45 USD Flash Manufacturing & Services PMI

15:00 USD Revised UoM Consumer Sentiment/Inflation Expectations

15:40 GBP MPC Pill Speaks