Sterling
Pound Sterling rocketed yesterday after the UK’s High Court ruled in favour of a challenge against the government’s intended use of Royal Prerogative to trigger Article 50. If the government doesn’t win its appeal in the Supreme Court, this means Parliament will have to vote on the UK’s exit from the EU. While it is unlikely that lawmakers would move to block Brexit completely, the Pound stormed ahead on investor hopes MPs would force the government to protect the UK’s access to the single market.
Euro
Investors were too concerned by the possibility of an extension to the European Central Bank’s (ECB) QE yesterday to capitalise on positive developments for the Euro. The US Dollar remained weak on election fears, while Eurozone unemployment was shown to have already fallen to a six-year low of 10% – a month earlier than anticipated.
With no impactful data set for release today, it is likely the Euro will see most of its movement come in reaction to the day’s US developments.
US Dollar
Markets continued to sell off the US Dollar yesterday on continued fears that Donald Trump could win the US election. A worse-than-expected decline in the ISM composite index from 57.1 to 54.8 accelerated the ‘Greenback’ sell-off.
With the unemployment rate and non-farm payrolls on the calendar today, the US Dollar is likely to see volatile trading later in the session.
Canadian Dollar
The Canadian Dollar remained immune to risk-appetite yesterday, with the recent surge in US crude oil stockpiles and fading hopes of a coordinated producer cut from OPEC weighing on the Canadian Dollar.
However, Canada’s unemployment rate and net change in employment today could support the ‘Loonie’, given the forecast of a -15k downtick in joblessness.
Australian Dollar
A return to growth for the October services PMI and a narrowing in the trade deficit from -2 billion to -1.2 billion supported the Australian Dollar yesterday. The data further reinforced the idea that the Reserve Bank of Australia (RBA) would keep a neutral policy bias, providing additional support for the ‘Aussie’.
With no domestic data on the calendar, volatility today can be expected in response to the high-profile US data.
New Zealand Dollar
Better-than-expected ecostats from China helped boost risk-appetite yesterday, much to the benefit of the New Zealand Dollar. The ‘Kiwi’ surged on hopes that one of the world’s largest economies – and major New Zealand trading partner – wasn’t heading for a dreaded hard landing.
As with the Australian Dollar, the New Zealand Dollar will be reacting largely to developments in the US today.
Data Released
12.30 USD Unemployment Rate (OCT) 4.9%
12.30 USD Change in Nonfarm Payrolls (OCT) 175k
12.30 CAD Unemployment Rate (OCT) 7.0%
12.30 CAD Net Change in Employment (OCT) -15.0k
14.45 GBP Bank of England Kristin Forbes Speaks in Washington
17.00 EUR ECB’s Constancio Speaks in Chicago