Daily Update – 7th November 2019
The euro edged lower against the U.S. dollar on Wednesday, as weak euro zone economic figures weighed on euro. Data showed Germany’s services sector barely grew in October, while euro zone business activity expanded slightly faster than expected last month but remained close to stagnation. The pound declined against the dollar Wednesday, as investors calculated the risks the upcoming general election poses to Britain’s ability to complete its exit from the European Union before Jan. 31, its latest departure deadline. Traders also waited to see what the Bank of England (BoE) might have to say regarding the impact of Brexit on the British economy, after its meeting on Thursday. Uncertainty around Britain’s departure from the EU has left a strong mark on business confidence and weak economic data makes it increasingly likely that BoE’s next move will be to cut interest rates, rather than an increase. The dollar declined on Wednesday, as U.S. productivity data disappointed and investors turned a bit cautious about U.S.-China trade talks. Traders and investors hope a preliminary deal will roll back at least some of the punitive tariffs Washington and Beijing have imposed on each other’s goods, but it remained uncertain when or where U.S. President Donald Trump will meet Chinese President Xi Jinping to sign the agreement. Market players are now waiting for the Bank of England, which will unveil its latest monetary policy decision this Thursday. Given Brexit in the way, the most likely scenario is that policymakers will maintain the status quo and the meeting a non-event. However, it is a central bank meeting and has the chance of triggering volatile moves. This Thursday, Germany will release September Industrial Production, while the US macroeconomic calendar will include weekly unemployment figures and September Credit Change.Yesterday Explained
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