USD: Up to its highest levels since July, and counting…

The US dollar had another good run last week as September’s non-manufacturing business activity smashed analyst expectations. And while the official jobs numbers came in below expectations for September, a drop in weekly initial jobless claims signaled a firming labor market and fueled the steady optimism for the US economy and the dollar.

The greenback is continuing to climb with the start of this 4-day week as investors grow increasingly optimistic that the Federal Reserve will raise interest rates at its meeting in December. On Wednesday morning we’ll see the latest mortgage application volume growth as well as the JOLTS job openings data for August. Thursday morning brings the weekly jobless claims report, the latest import and export price data, and a speech from Federal Reserve member Harker. Friday morning will show September’s retail sales and producer inflation readings, August’s business inventory growth data, and the latest consumer sentiment survey. Speeches from Rosengren and Janet Yellen set for late Friday morning will cap off the week. With investor optimism running high for the dollar, perhaps only negative surprises from the data out this week could derail the currency’s gains.

EUR: Steady Eurozone data, steady movements opposite the US dollar

The euro ended slightly lower against the rising US dollar again last week despite the fact that a slew of manufacturing/non-manufacturing output and retail sales results out of the region all came in stronger than expected, reflecting continued Eurozone strength. There are still some financial concerns around Deutsche Bank (Germany’s largest bank) and the region’s banking sector as a whole, which could be weighing on the currency.

The shared currency continues its downward trend against the rising US dollar this week despite institutional investors out of Germany and the broader Eurozone showing stronger economic optimism than analysts had anticipated. Wednesday morning will be busy with Germany’s latest wholesale price data, Italy and Portugal’s consumer inflation data, and the broader Eurozone’s industrial production readings for August. Thursday morning will bring Germany’s consumer inflation levels, which are expected to show slow but steady growth. The week will end with Friday morning’s consumer inflation readings out of Spain and Italy, to be followed by the Eurozone’s August trade balance data. As with past weeks, any less-than-resilient results from this week’s data could raise the odds for more central bank stimulus and weaken the euro.

GBP: “Hard Brexit” politics and policy could continue to overshadow data

The pound had one of its worst weeks since June’s Brexit vote after “hard Brexit” details from British Prime Minister Theresa May left investors uncertain about the UK’s trade agreements and ability to access the EU’s powerful single marketplace. This cloud of uncertainty seemed to overshadow any of the positive data that came out during the week, including September’s stronger-than-expected growth in UK housing prices, manufacturing output, service sector activity, and construction sector activity.

This week will be exceptionally light data wise, so the pound’s movement could continue to be tied to new information and details around the UK’s Hard Brexit plans, set to begin in March 2017. On Wednesday evening we’ll see September’s housing price balance data, while Thursday will bring a speech from Bank of England Governor Carney, which could give us more insight on his post-Brexit outlook. Friday morning’s credit conditions survey from the Bank of England will largely end the light data week.

CAD and AUD: Will rising oil lift the Canadian dollar this week? Will the Aussie dollar regain its attractiveness?

The Canadian dollar ended lower against its rising US counterpart last week despite the fact that oil prices steadily climbed above $51 per barrel. Canada’s trade results came in line with consensus expectations while building permits grew more than expected in August, helping to soften some of the currency’s decline. The Loonie is starting this week off lower as oil prices retreat, despite stronger-than-expected housing starts in September. This week will be exceptionally light data wise, with only August’s new housing price data coming out on Thursday morning. With a lack of other factors, the currency’s movements could largely be tied to oil price movements for the rest of the week.

The Australian dollar fell against the US dollar after two consecutive weeks of gains, perhaps as investors began to favor the greenback’s perceived safe-haven status and the US economy’s relative strength. The Aussie dollar is starting this week lower – perhaps for those same reasons — despite Monday’s stronger-than-expected business confidence readings. Tuesday night will bring the latest confidence readings from consumers, while we’ll see consumers’ inflation outlook on Wednesday evening. Thursday night’s financial stability review from the Reserve Bank of Australia will cap off the week. With little new data out for investors this week, you could expect the Aussie dollar to move in the opposite direction of its US counterpart.