USD Pullback and the Heavy Economic Data Week ahead

 USD Pullback and the Heavy Economic Data Week ahead

USD Pullback and the Heavy Economic Data Week ahead.

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The week ahead is key to the world of financial markets and traders alike as key data will be expected out. The week is likely to be dominated by fundamental data prints as traders and investors seek direction for the remaining part of the quarter and 2021. The morning was kicked on by German Retail sales data which missed estimates considerably with YoY Actual -0.9% vs Consensus 1.8% and MoM Act -2.5% vs Cons: 0.6%. German fundamental data tends to move the Euro (Eur) as Germany is a significant contributor to the Eurozone economy.

Wed 3 Nov will be the ADP Employment Change for Oct figure, this figure is a prelude to the Non- Farm-Payrolls (NFP) data expected out on Fri 5 Nov. ADP Employment change measures how many new hires private business in the US concluded. An uptick to this figure tends to suggest a forecast possible uptick in the NFP data in the subsequent Friday data print although this may not be the case always. Closely watched leading to Friday’s NFP data will be the Jobless claims data on Thursday afternoon. However, prior to NFP markets will be closely watching the much anticipated US Fed FOMC Press conference. With the market being hawkish on future interest rate movements, when US Fed Chair Powell speaks at the conference direction will be sought. What will be key to hear is the announcement of the start of the taper program. While this is well anticipated by markets, Chair Powell’s comments will be closely watched for the subsequent interest rate hiking that follows tapering the asset purchase program. Hawkish comments will tend to have a bullish bias to the USD.

Further across the Atlantic in the UK, markets will be watch the Bank of England (BoE) for its imminent interest rate hike decision on Thur 4 Nov. The BoE has long been anticipated to hike interest rates which saw sustained bullish moves of the Pound Sterling (GBP) against most basket of currencies notable GBPJPY. As the BoE MPC meets this week, markets have priced in a 15bps hike this Nov meeting. With BoE Governor Andrew Bailey recently commenting that he sees little reason to wait on an interest rate hike and rather opting to act now focus will be on the quieter two BoE Deputy Governors. A more hawkish interest rate hike by the BoE could possibly be bullish for the GBP against other currencies.   

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Terence Hove

Terence Hove, a Financial Markets Analyst with multi-asset brokerage firm Exness completed his BBusSci: Economics at Monash University. With over 8 year experience within financial service his expertise is well developed in financial markets analytics and trading. Exness is an industry leader that provides reliable online trading in financial markets. Exness offers professional services on the above-mentioned assets, please follow the link to learn more on the offering exness.com

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