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Mon 15 Jul 2024 09:04GMT

Stronger Eurozone Inflation Fails to Boost Euro Amid Focus on Politics and Global Trade

Published: 29 Nov at 4 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, France, Germany,

Pound Sterling (GBP)
The Pound’s movement steadied towards the end of the week. While markets bet the Conservative Party will win next month’s UK General Election, these bets have been largely priced into the Pound and as a result further gains for the currency are limited.

Britain’s final November manufacturing PMI will be published on Monday. However, with less than two weeks until the election, Pound movement is likely to become increasingly focused on UK election polling in the coming weeks.

Euro (EUR)
Many of today’s key inflation stats from France and the Eurozone overall beat expectations. However, as German retail sales fell short and signs of a Eurozone economic recovery are still limited, the Euro was unable to strongly benefit from the data.

The Eurozone could see stronger performance next week if Eurozone data continues to show signs of recovery. Eurozone manufacturing PMI data on Monday, for example, could boost the Euro if it beats projections.

US Dollar (USD)
The US Dollar’s support has remained strong in recent sessions. Even as US-China trade jitters worsen, lingering hopes that a trade deal could still be close are keeping the US Dollar appealing. On top of this, Federal Reserve interest rate cut bets remain lower following recent strong US data.

Next week will be another big one for US data which could influence Fed bets if it surprises. ISM’s US manufacturing PMI from November will be published during Monday’s American session.

Australian Dollar (AUD)
Limited hopes that US-China trade relations would continue to improve were not enough to keep the Australian Dollar steady today. Rising Reserve Bank of Australia (RBA) interest rate cut bets, as well as weak Australian data and US-China trade uncertainties, kept the ‘Aussie’ under pressure.

The coming week will be a key one for Australian Dollar movement as well. On top of reaction to US-China news, the Australian Dollar could be driven by Monday’s Australian building stats and of course Tuesday’s Reserve Bank of Australia (RBA) policy decision.

New Zealand Dollar (NZD)
While the latest New Zealand building permits data beat forecasts, US-China trade uncertainties and lingering Reserve Bank of New Zealand (RBNZ) interest rate cut bets kept GBP/NZD volatile, and the ‘Kiwi’ failed to recover much of its weekly losses.

Export and import prices will be published during Monday’s Asian session. This, as well as reaction to fresh US-China trade developments, will drive the New Zealand Dollar at the beginning of next week.

Canadian Dollar (CAD)
While Canada’s Q3 growth rate met expectations and even beat forecasts in the yearly print, it still showed that Canada’s economic activity slowed notably last quarter. This limited the Canadian Dollar’s late-week appeal and made it easier for GBP/CAD to sustain gains.

Canadian manufacturing PMI data will be published on Monday, but next week’s biggest event for Canadian Dollar investors will be Wednesday’s Bank of Canada (BoC) policy decision which could give markets a better idea of if the bank will continue to avoid a dovish stance.
As of Friday, 29th November 2019, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1733, GBP USD exchange rate was 1.2928, GBP AUD exchange rate was 1.9124, GBP NZD exchange rate was 2.0126, GBP CAD exchange rate was 1.717, and GBP CNY exchange rate was 9.0914.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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