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British Pound sees more gains, AUD/USD may drop with stocks

Published on: 10/26/18 12:04 PM

Tags: , , ,

Category: Currency, Forex, Market, World News

This past Friday, the British Pound saw gains for a second-straight day. There were recent reports that a Brexit deal might be “very close.” That was of benefit to the British Pound. The EU will also make a proposal for a free-trade deal which EU Chief Negotiator Michael Barnier will present on Wednesday. The Sterling was trading at 1.31 USD as of this report. While that’s the same level it was at one year ago, it’s still down from a high of 1.43 USD that it reached back in mid-April. Still, the recent two days of gains were seen as a positive while other currencies are having their issues.   Many analysts believe the GBP had a positive streak due to the US Dollar‘s pullback as the jobs report arrived with a mixed bit of messages. In those US reports, the unemployment number fell, which is good news. However, total hires were lacking in terms of the expected numbers.

Meanwhile

Meanwhile, Canada had a more positive report when it came to their employment situation. Reportedly, they added 63,300 employees in the month of September. That was the biggest addition this year and also since back in December 2017.   As one might expect, the good news in Canada helped their currency enjoy a positive day. However, gains were not tremendously high due to the fact that hourly earnings for permanent employees number didn’t provide a major increase. It was just 2.2 percent year over year which was considered the weakest growth in a year. The US and developing nations’ stock markets have also been in a rough patch recently. Over the past five days, traders saw the S&P 500 go down by as much as 0.97 percent. MCSI Emerging Markets ETF saw a drop of 4.84 percent which was its largest since this past February. However, US government bonds rose to new highs due to the possibility that the global credit situation will tighten.

Major story

One of the major stories that will impact the forex markets in the coming week is the presidential election taking place in Brazil. If the Social Liberal Party’s Jair Bolsonaro wins, it could also be a win for local stock markets.   One of the other things that investors will keep an eye on is there are declines in the Nikkei 225. This could help give a boost to the Japanese Yen, which is generally considered an anti-risk investment while causing the pro-risk Australian Dollar to decline more.