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Weekly FX Outlook November 30th



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GB Pound

Sterling had a mixed week.


Movements

GBPUSD started the week at 1.3332 and had a choppy week, trading around the highest level since the start of September, to close unchanged at 1.3338.


GBPEUR opened at 1.1224 and gradually moved lower to close down 0.77% at 1.1138.


Movement rationale

Sterling remained well supported throughout the week amid optimism over COVID-19 vaccines and hopes of an imminent Brexit deal. Nevertheless, the two sides still look apart on fisheries, national support for businesses and a resolution mechanism for future disputes. With no major data released last week and an overall positive risk sentiment, GBP was strong versus the USD, with the pair reaching a 3-month high, trading above 1.3390.



Week ahead

With a light UK economic agenda, Brexit remains the core focus for GBP investors:


Calendar

Tuesday 10:30am | Markit Manufacturing PMI (Nov)


US Dollar

The US Dollar was soft.


Movements

EURUSD opened at 1.1878 and initially traded lower to test 1.18 level, before moving higher and closing at a 3-month high of 1.1972 (+0.79%).


GBPUSD started the week at 1.3332 and had a choppy week, trading around the highest level since the start of September, to close unchanged at 1.3338.


Movement rationale

The Dollar continued to struggle last week as downward pressure kept mounting, pushing the Dollar Index to its lowest level since 2018.The USD weakness was mainly driven by the prevailing improved risk environment, which has lowered demand for safe-haven currencies. The Trump administration’s decision to trigger the formal transition process to President-elect Joe Biden helped to reduce the political uncertainty in the US and probably provided some support for the currency. FOMC minutes released last Wednesday had little impact on the currency, with vague indications to the future scale and scope of its bond buying programme.



Week ahead

USD is expected to have a relatively volatile week ahead, with the following main events having the potential to influence financial markets:


Calendar

Tuesday 4pm | ISM Manufacturing PMI (Nov)

Wednesday 2:30pm | Employment Change (Nov)

Thursday 4pm | ISM Services PMI (Nov), Initial Jobless Claims (Nov 27)

Friday 2:30pm | Nonfarm Payrolls (Nov), Unemployment Rate (Nov)


Euro

The Euro had a relatively calm week.


Movements

EURUSD opened at 1.1878 and initially traded lower to test 1.18 level, before moving higher and closing at a 3-month high at 1.1972 (+0.79%).


GBPEUR opened at 1.1224 and gradually moved lower to close with a negative change of 0.77% at 1.1138.


Movement rationale

Last week there were several negative data releases including a sharp downturn in November’s Eurozone services PMI and poor Consumer Confidence figures in Germany and France as new coronavirus restrictions hit. However, the Euro is primarily benefitting from rival currencies’ weakness and driven by global market sentiment, with EUR/USD flirting with the 1.20 level - near a 3-month high.



Week ahead

The Eurozone economic data calendar includes the following:


Calendar

Tuesday 11am | Consumer Price Index (Nov)

Wednesday 11am | Unemployment Rate (Oct)

Thursday 11am | Retail Sales (Oct)


Call +44 (0) 203 884 992 to discuss further with an advisor.

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