Hillary made toupee, Trump weaves his way back
The Pound suffered from moderate month-end selling on Friday, compounded by Northern Ireland’s High Court Ruling that Article 50 can be enacted without parliamentary approval. The ratings agency Standard & Poor’s has questioned whether Sterling can continue to be a global reserve currency.
The UK currency declined to just below 1.2150 against the Dollar and 1.1100 versus the Euro. Speculation over Mark Carney’s future continues to grab the headlines, but we should find out more at Thursday’s Bank of England’s Interest Rate decision and Quarterly Inflation Report.
The third quarter US GDP reading trounced the previous reading of 1.4%, printing at an impressive 2.9% and beating the consensus of 2.5%. Although consumer spending growth slowed, there was an improvement in investment and gains in net exports.
The Dollar came under pressure when the FBI surprised by publicly announcing that it had reopened the investigation into Hillary Clinton’s e-mails, with little over a week to go until polling day. Cautiousness is expected to swell later in the week in light of the Federal rate decision on Wednesday, Non-farm Payrolls on Friday and the US elections on November 8th. This may result in US traders keeping trading volumes to a minimum and therefore raising the volatility.
The Euro benefitted from the release of German inflation figures. CPI was slightly stronger than expected with a monthly basis at 0.2% with the annual increase in line with the consensus forecast at 0.8% from 0.7% previously. The Eurozone’s third quarter GDP and inflation data, released this morning, will be keenly anticipated. The Bundesbank could argue that better than expected results are reason to avoid extending the European Central Bank’s Bond Purchasing Scheme.
Data to watch: 9.30am UK Consumer Credit (Sep), Mortgage Approvals (Sep). 10am Euro Q3 GDP, Quarter on Quarter & Year on Year. Consumer Price Index (Sep), Quarter on Quarter & Year on Year. 12.30pm US Personal Consumption Expenditure & Core PCE, Quarter on Quarter & Year on Year. Personal Income, Personal Spending. Chicago PMI (Oct). Dallas Fed Manufacturing Business Index (Oct).