14th November - Weekly FX Update

Top Currency Pairs Monday 14th November 04:00 UTC GBP/USD: 1.17773 (Last Week: 1.13312) EUR/USD: 1.03261 (Last Week: 0.99387) GBP/EUR: 1.14054 (Last Week: 1.13999)

Market News

Pound Sterling It is set to be a significant week for the Pound with a busy schedule of key economic data releases coming up throughout the week. Starting with Tuesday, we see the release of the unemployment data which could cause a market reaction if the data differs from expectations, currently predicted to be an unchanged unemployment rate of 3.5% with 155k job losses. On Wednesday inflation figures will be released, which hit 10.1% in September and is expected to rise to 10.6% for October which should be the apex point given that energy prices are now being fixed until April 2023. Thursday will see the announcement of Jeremy Hunts new fiscal plan which will be of particular interest to investors after Septembers badly received mini budget set by Kwasi Kwarteng. It has been hinted that Jeremy Hunt intends to introduce £60 billion in tax increases coupled with spending cuts to tackle the poor state of the public finances. How volatile the Pound becomes this week rests on how much the data taken from these key events deviates from expectations.

Euro The Euro had a particularly good week last week against the U.S Dollar gaining nearly 500 basis points off the back of the easing of inflationary pressures on the American economy. Many analysts are expecting the market to level out in the coming days and weeks but there was more good news this morning as industrial production in the euro area grew by 0.9% on a month-by-month basis in August which was higher than the previously predicted increase of 0.3%. Overall industrial production also grew by 4.9% on a yearly basis also higher than the expected estimate of 2.8% which should prompt a positive market reaction for the Euro against major currencies.

U.S. Dollar After interest rate hikes of 75 basis points on the last four occasions, last week's U.S inflation data made for good reading as it is now thought that the Federal Reserve will be less aggressive with their interest hikes from December. On Wednesday we see the release of the retail sales report for October which will be a key indicator of how well consumers are coping ahead of the Christmas shopping season. We also see the release this week of data from October on industrial production, producer price inflation, housing starts and existing home sales which will shape the opinion of investors and the Dollars performance overall in the coming weeks.

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