Hammond’s statement delivers boost for pound | Euro struggles after experts voice concerns

Currencies Direct November 28th 2016 - 2 minute read

Analysts are predicting that the week ahead will be potentially a big one for the dollar, as the US readies itself for economic reports on GDP consumer spending and employment throughout the week, all of which should dictate its performance.
Elsewhere, the euro is expected to remain subdued, while the pound could build on the strength it experienced last week, when it reached November highs.

Hammond’s statement delivers boost for pound
The pound experienced an unexpected boost last week as Philip Hammond delivered his first Autumn Statement as chancellor, prioritising spending on both infrastructure and innovation, which allowed the pound to perform better than all other major currencies for the day on Wednesday.
This week, the pound will be expected to continue to build on the strength it showed last week, but following the Autumn Statement, GDP will mostly be following what happens elsewhere, with economic data from the US, OPEC meetings in Canada and the ECB's latest plans in Europe likely to dictate how sterling performs in the coming week.

Euro struggles after expert voice concerns
Concerns about the euro continue, after it performed badly against both the pound and the dollar last week, after experts reasserted worries that the single currency is mostly reliant on austerity from policymakers in the current climate.
In the week ahead, European Central Bank (ECB) president Mario Draghi is due to speak on Monday about economic and monetary developments following the UK's decision to leave the EU in a bid to curb economic concerns in the Union.
However, the speech in Brussels is not expected to have too much of an impact in the coming days on the euro as Mr Draghi recently said the ECB will continue its €1.7 trillion bond-purchase program in December, which shows the economy still has risks on the downside.
Multiple data sets contribute to big week for US dollar

There could be a big week ahead for the dollar, following a week in which it saw growth against both the euro and the Japanese yen on the back of strong data on business investment. The release of various sets of data in the next five days will dictate how it follows up on this movement, however.
Coming early this week will be the latest GDP data from the US, which is expected to help boost the dollar. After consecutive quarterly falls, the economy rebounded in Q3, and it is expected to follow this up with a 3% yearly growth in November.
Elsewhere, consumer confidence is expected to show an increase, with spending boosted as a result in the lead up to Thanksgiving and the holiday period, while job growth is expected to continue, reaching 161,000 in November. However, analysts caution that this is starting to slow somewhat.
OPEC meet this week may dictate Canadian dollar’s direction
The Canadian dollar has been erring on the side of weakness for some time now, and it is expected to face yet another volatile period this week.
On Wednesday, Canada faces one of the most important meetings of the year, when OPEC meets to discuss a collective oil supply freeze. This could well dictate how well the dollar performs for the rest of 2016.
Should OPEC decide to cap supply, then the price per barrel of oil could climb to $60, which would help to boost the loonie, given that oil is by far the country's biggest export, however, it will all rest on what remains an uncertain decision at this point in time.

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