Despite Friday’s decent rebound, the US Dollar (USD) ended the week on the back foot, extending the rejection from previous multi-week highs. The move lower in the Greenback came mostly from renewed US-China trade effervescence, concerns over the impact on the US economy from the ongoing government shutdown, and persistent views of a more dovish Federal Reserve in the next few months.
The US Dollar Index (DXY) reversed three consecutive daily pullbacks on Friday amid a decent bounce in US Treasury yields across the spectrum. Meanwhile, the current federal government shutdown remains in place, undermining the release of US data. The API’s weekly report on US crude oil inventories is expected on October 21. The usual weekly MBA Mortgage Applications are due on October 22, prior to the EIA’s weekly report on US crude oil stockpiles. On October 23 will come the Chicago Fed National Activity Index and Existing Home Sales. The US Inflation Rate takes centre stage on October 24 alongside flash S&P Global Manufacturing and Services PMIs, the final U-Mich Consumer Sentiment and New Home Sales.
EUR/USD ended the week with decent gains, recovering ground lost although failing to reclaim the area beyond the 1.1700 hurdle. The Current Account results and Construction Output readings in the euro area are due on October 20. The preliminary Consumer Confidence in the euro bloc will be released on October 23, while the advanced HCOB Manufacturing and Services PMIs in Germany and the euro zone alongside the ECB’s Consumer Inflation Expectations will wrap up the domestic docket on October 23.
In line with the rest of its risk-linked peers, GBP/USD closed the week in an upbeat mood around the 1.3400 region. Public Sector Net Borrowing will be the salient event on October 21. The key UK Inflation Rate is expected on October 22, while the CBI Business Optimism Index and the CBI Industrial Trends Orders are all due on October 23. An interesting docket comes on October 24 with the releases of Retail Sales, the GfK Consumer Confidence print, and flash S&P Global Manufacturing and Services PMIs.
USD/JPY closed the week with decent losses above the 150.00 barrier, coming under marked pressure following tops north of 153.00 recorded in the previous week. The Balance of Trade results are due on October 22, followed by the weekly Foreign Bond Investment prints on October 23. Japan’s Inflation Rate takes centre stage on October 24 ahead of the preliminary S&P Global Manufacturing and Services PMIs and the final readings of the Coincident Index and the Leading Economic Index.
AUD/USD managed to bounce off two-month lows, ending the week with acceptable gains just below 0.6500 the figure. The flash S&P Global Manufacturing and Services PMIs are expected on October 24.
Anticipating economic perspectives: Voices on the horizon
- The BoJ’s Takata and the ECB’s Schnabel speak on October 20.
- The RBA’s Jones, the BoJ’s Himino, and the Fed’s Waller will speak on October 21, along with the ECB’s Nagel, Lane, and Lagarde, and the BoE’s Cleland.
- The ECB’s Lagarde, Buch and De Guindos will speak on October 22, seconded by the BoE’s Woods.
- The ECB’s Lane speaks on October 23, followed by the BoE’s Hall.
- The RBA’s Bullock, the ECB’s Cipollone and the BoE’s Woods are all due to speak on October 24.
Central banks: Upcoming meetings to shape monetary policies
- The PBoC meets on October 20 (3.00%-3.50% act. vs. 3.00%-3.50% exp.).
- The MNB will decide on rates on October 21 (6.50% act. vs. 6.50% exp.).
- The BI will meet on October 22 (4.75% act. vs. 4.75% exp.).
- The BoK (2.50% act. vs. 2.50% exp.) and the CBRT (40.50% act. vs. 38.75% exp.).
