Pound fluctuates ahead of UK services PMI

• Political news and UK budget deficit trigger GBP fluctuations
• ECB minutes keep euro under pressure
• Optimistic BOC comments lift Canadian dollar

 
Will GBP rise after UK services PMI?
 
The pound recorded some short lived gains yesterday as polling data continued to favour the Conservative party in the upcoming election.
 
However, GBP was restrained by a greater-than-expected widening of the UK budget deficit.
 
While some of the sharp increase in government borrowing was due to preparations ahead of the former Brexit deadline the figure still provided cause for concern.
 
GBP exchange rates may find a rallying point this morning if November’s services PMI picks up, but another stagnant reading would be GBP-negative.
 
 
Euro vulnerable to evidence of Eurozone manufacturing weakness
 
Support for the euro proved generally limited In the wake of the release of the European Central Bank’s (ECB) October meeting minutes.
 
Although the minutes revealed that some policymakers pushed for the central bank to adopt a ‘wait and see’ approach this was not enough to ease concerns that further monetary loosening is on the cards.
 
Another negative month for the Eurozone manufacturing PMI could put additional pressure on the single currency this morning.
 
 
Canadian dollar looks for fresh support on retail sales rebound
 
Comments from Bank of Canada (BOC) Governor Stephen Poloz helped keep the Canadian dollar on an uptrend as he expressed satisfaction with the current level of monetary policy.
 
His remarks reduced the risk of the BOC cutting interest rates in the months ahead, even as the ADP employment change report saw a surprise decline.
 
The mood towards the Canadian dollar could improve further this afternoon on the back of September’s retail sales data as economists expect a rebound in consumer spending.
 
 
Upcoming Data:
 
22^nd November 2019
09:00 EUR Eurozone Manufacturing PMI
09:30 GBP Services PMI
13:30 CAD Retail Sales
14:45 USD Manufacturing PMI