By Jonathan Lloyd
With UK GDP falling roughly in line with market expectations on Tuesday and Eurozone HICP also coming in close to estimates on Wednesday, market movement in GBP/EUR has been fairly limited this week. That being said we have moved incrementally away from a lower trading range that has been evident since late September. This could in part be due to the Labour party conference earlier this week, with both the Chancellor and the Prime Minister not doing anything to rock confidence in the pound… yet. The US government shutdown has grabbed headlines from a dollar perspective, although has not seen a major reaction so far in currency markets. That could change if we do not see Non-Farm Payrolls data today, and if the shutdown moves deeper into next week and beyond.
With a quiet data docket in the UK and Eurozone next week, expect any major movements to be influenced by politics or geo-political events. With the Autumn budget still looming, any upside for the pound may be outweighed by downside risk as we head towards November 26th.
Key market events remaining this week
Friday*
USD – US Labour data including Earnings, Unemployment and NFP.
USD – ISM Services PMI
*Data releases may be delayed due to US Government shutdown.