After lacking direction through Monday’s session, the pound may experience more significant movement today on the latest UK jobs data.
The pound, meanwhile, is struggling in early trade this week, with GBP/EUR muted at €1.1909 and GBP/USD dipping to $1.3423. GBP/CAD is rangebound at C$1.6979, while GBP/AUD and GBP/NZD retreat to AU$1.8530 and NZ$1.9165 respectively.
Looking ahead, will the euro extend these losses at the start of this week with the publication of the Eurozone’s latest consumer confidence index?
The euro closed last week’s session on the defensive, with the single currency coming under pressure for some dovish comments by European Central Bank President Christine Lagarde, in which she suggested ‘the conditions to raise rates are very unlikely to be satisfied next year’.
What’s been happening?
Moreover, the announcement that Austria would be re-entering lockdown also weighed on EUR exchange rates.
In addition to this the euro was also undermined by the strengthening of the US dollar, which was bolstered by considerable risk-off flows on Friday.
The souring market mood was attributed to lingering concerns over the collapse of the Turkish Lira, as well as anxiety over Europe’s Covid resurgence.
Meanwhile, the pound traded with modest gains at the end of last week, after the UK’s latest retail sales figures beat forecasts, further bolstering expectations for the Bank of England (BoE) to hike interest rates next month.
Turning to this week, the focus at the start of the session will be the releases of the Eurozone’s latest consumer confidence index.
What’s coming up?
This could see the euro struggle today as economists forecast consumer morale will have deteriorated again in November.
In the meantime, the publication of the Confederation of British Industry’s (CBI) industrial trends order index could help the pound get off to a robust start this week, if order growth improved as forecast this month.
Finally, in the absence of any notable USD data, the direction of the US dollar may be dictated by market sentiment, potentially pushing the ‘greenback’ higher if Friday’s risk-off mood persists into this week.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)