Tuesday starts off with a speech from ECB (European Central Bank) member Elizabeth Mccaul at 10am. Could we hear something that will indicate a more detail plan for ECB moving forward with their monetary policies? Overall, EUR has been outperformed in the last couple of weeks – particular to the USD. Since Friday we have seen both GBP and EUR consolidate on the markets against the USD. EUR/USD dropped to 1.0335 on Friday, being a 2-year low. It’s stabilised since and is currently hoovering around the 1.05-mark.
For later today focus is on the US with several economic data releases and an announcement with the FOMC minutes. Starting off at 2pm, we have a combination of consumer confidence, housing prices and new home sales. Expectations is that US consumer confidence will increase in November up to 111.6, indicating that after the US election – confidence is now growing from a consumer point of view. At the same time house prices and new home sales are expected to be unchanged from its previous month. With USD recently taking advantages to its peers – this should not lead to much fluctuations on markets.
More importantly for today though is the FOMC minutes that is taking place at 7pm. Federal Reserve has not ruled out that interest rate decisions could be paused in December, even if the percentage suggest we should see another 25 basis point. Today’s meeting could indicate in more detail what path the Federal Reserve want to take. If we start seeing signs of a more dovish tone on lowering borrowing costs – markets will react to this, and it could lead to additional USD strength in that case. Whereas if they signal markets that they will continue to lower borrowing costs by 25 basis points – market should be fairly unchanged in this case with a interest rate cut already been priced in.
GBP/EUR 1.1955 GBP/USD 1.2560 GBP/AED 4.6153
GBP/AUD 1.9375 GBP/CHF 1.1125 GBP/CAD 1.7710
GBP/NZD 2.1504 EUR/USD 1.0497 GBP/ZAR 22.7487