The week starts off with some hard data, with the release of unemployment figures in Germany. With a negative 10k change in the face of an expected 5k growth, this may well build on the recent negative slant Germany has seen on the flagging economy, as well as recession concerns. The inflation data will follow this afternoon to firm up any directional moves the Euro takes from this data.
The UK has some economic readings at 09:30, with the Balance of Payments readings and GDP due. These figures may be the spark that kicks of the pound’s momentum to start the week.
The week ahead will be busy with politics – a familiar theme at this point. On the US front, the President will be dealing with the impeachment push, with obvious repercussions on the global sentiment. We expect haven currencies such as the Yen to benefit from the growing concerns, with a Bloomberg article forecasting the Yen to have the biggest advance against the USD throughout Q4.
Of course, Brexit politics will garner centre stage as we step into October and approach the deadline date. Johnson goes into his meeting with the Conservatives with “Get Brexit Done” leading his narrative.
Developments will be on a day to day basis, as Parliament decide on whether the gamble of no-confidence vote and installation of temporary government would pay off or present Johnson the route to complete a no-deal Brexit if indecision leads to Parliamentary dissolve.
GBPUSD starts the week knocking on the 1.23 door, whilst GBPEUR sits in the middle of 1.12, with Monday trading searching for a direction on the pair.
Have a great week ahead.