The week starts with the major Central Banks decisions in the rear mirror with markets now keen to look forward towards the major currencies and their projected outlook going into Q4.
At London open this morning, we find ourselves in a familiar trading zone as GBPUSD starts the week at 1.245 and GBPEUR 1.1320.
The EURUSD, however, has suffered from the hawkish cut from the Federal Reserve, as it can be seen to be again falling below the 1.10 mark this morning with a disappointing Germany PMI data reading adding further weight. This has left the Dollar with, what some believe to be, slightly artificial strength.
Another 25bps cut this year is now hanging in the balance of Powell and the data releases needed to convince him of further monetary easing.
The Brexit outlook this week will be critical as ever. While Johnson takes a few days away to go to New York for the United Nations General Assembly, the decision taken by the Supreme Court on whether laws were broken in the suspension of Parliament is due out at the beginning of the week. Expect the market to be very sensitive to this with the outcome to dictate which way the pound may swing.
Although Juncker’s comments last week provided a healthy boost to the pound, as of Sunday he has stifled this with a cautious tone, stating that he is not yet convinced Johnson has a solution to the Irish Border.
This week provides good opportunity for taking stock going into the final few months of the year and to start seriously considering your 2020 requirements with an element of realism, considering the current circumstances and the impact this will have in the following year.
Have a great week ahead.