Previous Day's Market Highlights
Initial figures showed that the UK’s economy grew at a faster pace in Q3 than anticipated, which sent the pound higher as investors anticipated that this could make a BoE rate hike more likely next week. The economy grew 0.4%, up from 0.3% in Q2. Sterling rallied around 1.0% against the euro and the dollar, capping gains in the afternoon session.
The Canadian dollar fell as the Bank of Canada kept interest rates on hold at 1.0%, pushing sterling-loonie to its highest levels since 28 June. The kiwi dollar’s woes continued with a wider-than-forecast trade balance. This additional pressure saw sterling-kiwi break 1.9300 overnight for the first time since the EU referendum.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
|GBP / EUR||1.1210||1.1416||1.1069||3.04%|
|GBP / USD||1.3253||1.3456||1.3027||3.19%|
|EUR / USD||1.1822||1.1880||1.1669||1.78%|
|GBP / NZD||1.9251||1.9334||1.8367||5.00%|
|GBP / CAD||1.6959||1.7002||1.6350||3.83%|
Today's Market Highlights
Attention turns to the day’s highly anticipated ECB meeting. The ECB is expected to announce the next step for its QE programme (12:45 BST), whilst keeping interest rates on hold. Should the ECB postpone announcing the next step, markets would likely be disappointed and the euro would likely weaken.
If the reduction in monthly purchases or the extension of the timeline purchases indicates a greater amount of stimulus than markets are anticipating, the euro could weaken, although overall signs of tapering are usually supportive for the euro.
If the steps announced today are considered more hawkish than expected, such as a larger reduction in monthly purchases or shorter timeframe extension, the euro may strengthen.
ECB President Draghi may try to take a more cautious tone in the press conference (from 13:30 BST), but in recent months markets have chosen instead to focus on the fact that the ECB is headed on a path of policy normalisation.
While traders’ focus will primarily be on the ECB, they’ll also keep an eye on US unemployment and housing data (13:30, 15:00 BST) for any surprises ahead of next week’s Fed meeting.
Today's Economic Calendar
|12:45||EUR||ECB Interest Rate Decision||0.0%||0.0%|
|12:45||EUR||ECB Deposit Rate Decision||-0.4%||-0.4%|
|13:30||EUR||ECB Press Conference|
|13:30||USD||Initial Jobless Claims (20 Oct)||235K||222K|
|13:30||USD||Goods Trade Balance (Sep)||$-63.80B||$-62.94B|
|15:00||USD||Pending Home Sales YoY (Sep)||-3.1%|
|15:30||USD||FOMC Member Kashkari Speech|