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Date : 27th November 2020.

FX Update – November 27 – Sterling in Focus


GBPUSD, H1
Narrow ranges have been prevailing in risk-cautious trading. The USDIndex settled around the 92.00 level, above yesterday’s 12-week low at 91.84. EURUSD remained buoyant but off from the 12-day peak seen yesterday at 1.1942. Cable also held within its Thursday range. USDJPY ebbed to a four-day low at 103.91. The Yen was concurrently steady versus the Euro and the Pound, but posted respective two- and four-day lows against the Australian and Canadian Dollars. AUDUSD ticked fractionally higher, which was still sufficient to lift the pair into 12-week high terrain above 0.7380. NZDUSD posted a new 29-month peak at 0.7030. USDCAD remained heavy but just above recent 17-day lows. Bitcoin, which performed strongly this year on the back of dollar liquidity, found a toehold, but remained over 12% down on its recent highs.



US markets will reopen after yesterday’s Thanksgiving holiday, but market conditions will remain on the thin side. President Trump said that he will leave the White House if the Electoral College votes for Biden, which may be as close to formally conceding the election as he will go. A sharp focus remains on EU and UK talks, with a face-to-face round reportedly taking place in London over the weekend. There are now reports that the EU parliament might convene as late as December 28 to ratify a deal, if necessary.

The spectre of a no-deal hangs over proceedings, though the consensus, as judged by the ongoing stability of the Pound, remains for a narrow deal to be reached.



Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

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Stuart Cowell
Head Market Analyst
HotForex

Disclaimer:
This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
 
Date : 30th November 2020.

Events to Look Out for This Week.




Europe and US are in the middle of a second wave of Covid-19 infections. The prospect of another hit to the economy in Q4 and emerging lockdown disruptions.still leaves central banks and fiscal authorities in crisis mode, but positive news on the vaccine front leaves investors looking ahead to the recovery. Next week’s focus will remain on the virus, Brexit as the latest and supposedly final deadline, is next Tuesday, OPEC+ group which will also decide on extending prevailing quota restrictions next Tuesday, and on the Non-Farm Payroll outcome.

Monday – 30 November 2020

  • Eurogroup Meeting
  • Non-Manufacturing PMI (CNY, GMT 01:00) – The Non-manufacturing PMI is expected to slowdown to 52.1 from 56.2 in October.
  • Harmonized Index of Consumer Prices (EUR, GMT 13:00) – The German HICP preliminary inflation for November is anticipated to remain unchanged at -0.5% y/y.
  • Pending Home Sales (USD, GMT 15:00) – Pending home sales experienced a minor decline at -2.2% in September after four consecutive months of contract activity growth/ For October we could further decline to -2.6%.
Tuesday – 01 December 2020

  • RBA Rate Statement & Interest Rate (AUD, GMT 03:30) – In the last meeting, RBA stepped up stimulus to ensure recovery by announcing a package of measures designed to secure a rapid recovery from the crisis now that lockdowns have lifted. RBA’s Lowe also stated that he sees no appetite to go into negative rates. The central bank head send a pretty clear signal that the focus now has shifted to asset purchases, with no appetite at the central bank to move into negative rate territory.
  • Consumer Price Index (EUR, GMT 10:00) – Preliminary November inflation expected to remain unchanged at -0.3% y/y in the final reading for September, unchanged from the preliminary release. Core inflation meanwhile declined to 0.2% y/y and while special factors are playing a role, officials clearly are increasingly concerned that the prolonged period of underinflation and now negative headline rates will prompt a more lasting shift in price expectations, which against the background of a sizeable output gap and rising unemployment lifts the risk of real deflation down the line.
  • Gross Domestic Product (CAD, GMT 13:30) – Canada GDP results for the Q3 are seen to be slowing down, at a yearly rate of -39.6% compared to 38.7% last month.
  • ISM Manufacturing PMI (USD, GMT 15:00) – US manufacturing PMI is expected to fall to 57.5 in November from a 2-year high of 59.3 in October. We’re seeing a modest November pull-back in available producer sentiment measures to still-elevated levels, as output is continuing to rise in the face of plunging inventories and rising sales, with limited headwinds from delayed stimulus and continued virus outbreaks.
  • Fed’s Governor Powell testimony (USD, GMT 15:00)
Wednesday – 02 December 2020

  • RBA’s Governor Lowe speech (AUD, GMT 00:00)
  • Gross Domestic Product (AUD, GMT 00:30) – GDP is the economy’s most important figure. Q3 GDP is expected to confirm slowdown to -7.8% q/q and -7.2% y/y.
  • Retail Sales (EUR, GMT 07:00) – German sales are anticipated to have fallen slightly to -0.8% in October, compared to -2.2% m/m in September.
  • ADP Employment Change (USD, GMT 13:15) – The ADP Employment survey is seen at 500k for November compared to the 365K in October.
Thursday – 03 December 2020

  • Trade Balance (AUD, GMT 00:30) – Australian retail trade is expected to see a strong decline in August, at -8.5% y/y from the downwards revision in June at -2.9% y/y.
  • Retail Sales (EUR, GMT 10:00) – Retail Sales dropped -2.0% m/m in September, more than anticipated. It left the annual rate still at 2.2% y/y, indicating a pick up compared to the same months last year, but different sales season amid the pandemic distort the picture and the annual rate is actually down from 4.2% y/y in the previous month.
  • ISM Service PMI (USD, GMT 15:00) – US Markit October services PMI was revised up to 56.9 in the final read versus 56.0 in the preliminary. It’s the best reading since April 2015 and is a third month in expansion. In November the ISM Service PMI is seen at 56.4.
Friday – 04 December 2020

  • Retail Sales (AUD, GMT 00:30) – October’s Retail sales could be improved by 1.6%, following a -1.1% September loss.
  • Non-Farm Payrolls (USD, GMT 13:30) – Expectations are for the headline number to be around 750k in November, after gains of 638k in October, 672k in September. The jobless rate should fall to 6.8% from 6.9% in October, versus a 14.7% peak in April. Average hourly earnings are assumed to rise 0.1% in November, with a headwind from further unwinds of the April distortion from the concentration of layoffs in low-wage categories slows. This translates to a y/y gain of 4.2%, down from 4.5%. We expect the payroll rebound to continue through year-end, though the climb is leaving a net drop for employment for 2020 overall.
  • Employment Change & Unemployment Rate (CAD, GMT 13:30) – Canadian data coincides with the USA release today with dire expectations for a slight deduction in Unemployment to 8.8% from 8.9% last month and a rise from the 83.6 in October for employment, to 100k.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer:
This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.