Coronavirus Developments and Brexit Headlines Rock Markets
Find out how the major currencies have been performing and what movement we could see in the days ahead with our weekly exchange rate update.
EUR – Euro Muted as Europe’s Coronavirus Woes Continues
The Euro struggled for direction this week as news of another potential coronavirus vaccine was offset by ongoing concerns over the realities of Europe’s current situation, with soaring cases and further restrictions putting strain on the Eurozone economy.
Kicking off next week’s session is the publication of the Eurozone’s latest PMI releases, with the Euro likely to face some pressure as November’s preliminary figures are expected to report private sector growth contracted this month.
Top EUR data releases:
Nov 23 EUR Manufacturing PMI (Nov)
Nov 23 EUR Services PMI (Nov)
Nov 24 EUR German GDP (Q3)
USD – US Dollar Fluctuates Following Vaccine Announcement
The US Dollar initially fell back this week as markets welcomed the announcement of another potential coronavirus vaccine candidate from US biotech firm Moderna. However, with coronavirus cases surging in the US and across Europe, market mood soon soured, reviving the ‘Greenback’s fortunes in the latter half of the week.
Looking ahead, the US Dollar may find itself back on top next week, as growing alarm over the second wave of coronavirus infections, and ongoing uncertainty over the US presidential transition are likely to see investors favour the safe-haven currency.
Top USD data releases:
Nov 25 USD GDP (Q3)
Nov 25 USD Durable Goods Orders (Oct)
Nov 25 USD Personal Spending (Oct)
GBP – Pound Rocked by Brexit Developments
The Pound traded in a wide range over the past week amidst some back and forth over the state of Brexit trade talks. This resulted in Sterling briefly striking a new two-month high on suggestions a deal could be signed ‘early next week’, before falling again as this was brought into question by the EU decision to publish its no-deal Brexit plan.
Turning to next week’s session, the spotlight will undoubtedly remain on Brexit, with the Pound poised to surge if a deal is in fact agreed.
Top GBP data releases:
Nov 23 GBP Manufacturing PMI (Nov)
Nov 23 GBP Services PMI (Nov)
AUD – Australian Dollar Fluctuates in Mixed Trade
The Australian Dollar initially started solidly again this week, with the risk-sensitive currency rallying in response to more positive coronavirus vaccine news. However, the ‘Aussie’ was unable to consolidate these gains, slipping back through the second half of the week as vaccine euphoria gave way to renewed coronavirus jitters.
Looking ahead, it’s likely we will see more volatility ahead for the Australian Dollar as coronavirus developments look set to continue dominating market sentiment.
Top AUD data releases:
Nov 22 AUD Manufacturing PMI (Nov)
Nov 22 AUD Services PMI (Nov)
Nov 20 AUD Retail Sales (Oct)
ZAR – Rand Retreats from Eight-Month High on Cooling Risk Appetite
The South African Rand skyrocketed in early trade this week as news of another promising coronavirus vaccine turbocharged the emerging market currency. However, the Rand was unable to sustain these gains, retreating through the latter half of the week following some dovish comments from the South African Reserve Bank (SARB).
Coming up next week, the focus for ZAR investors will be on South Africa’s latest CPI figures. Will another drop in inflation see the Rand move lower?
Top ZAR data releases:
Nov 25 ZAR Inflation Rate (Oct)
Nov 27 ZAR Business Confidence Q4
CAD – Canadian Dollar Struggles to Hold Gains Despite Robust Oil Prices
The Canadian Dollar made some steady gains through the first half of this week’s session, with the commodity-linked currency being carried higher by rising oil prices. However, in spite of some upbeat domestic inflation the ‘Loonie’ was unable to consolidate these gains towards the end of the week.
In the absence of any notable data, CAD exchange rates are likely to remain tied closely to oil movements next week, potentially attempting another move higher if crude prices continue to strengthen.
ILS – Shekel Surges to Record High
The Israeli Shekel was back on the offensive this week, with the ILS exchange rate jumping to a record high against a basket of its currency peers as Israel began to emerge out of lockdown.
Coming up next week the focus will be on Israel’s latest jobless figures, where an expected fall in unemployment last month may extend the upside in the Shekel.
Top ILS data releases:
Oct 26 Industrial Production (Aug)
Oct 29 ILS Unemployment Rate (Sep)