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Euro may not benefit from economic calendar, pound awaits Brexit proposal

Published on: 11/2/18 10:07 AM

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Category: Currency, Market, Trading, World News

Last weeks Euro fluctuations


Last week, traders watched as the Euro climbed a bit against several currencies including the US dollar and Great Britain’s pound. However, it also fell against several others. It was up 0.06 percent against the GBP and 0.31 percent against USD. However, the Euro was down 0.68 percent when compared to the New Zealand dollar (NZD) and down 1.03 percent against the Japanese yen (JPY).

There wasn’t much in the way of key information on last week’s economic calendar. Traders are still awaiting any sort of developing news with regards to the Italian budget, Brexit, or the US-China trade war. Much focus last week was placed on the US Treasury bond market and its rising yields. There was also focus on how the world equity markets were reacting to this information.

This week


It’s likely that this week’s economic calendar won’t give any helpful or groundbreaking data to take the focus off financial forex market stress either. On Tuesday, the German and Eurozone ZEW Survey is considered the biggest data of the week. However, it’s expected that most traders and analysts will be looking past it a day later. The Citi Economic Surprise Index fell from -13.6 to -24.8 for the past month, which shows that overall economic data hasn’t been very good for the Euro.

The speculation regarding Thursday’s final Eurozone CPI release for September is that it won’t be anything too surprising. It’s expected there won’t be any changes in the monthly, yearly, or core yearly numbers. Those readings were +0.2 percent, +2 percent, and +0.9 percent, respectively.

Speculations


Speculators also increased net-short Euro positions for the week ending October 9th. According to the CFTC’s COT for that period, positions rose from 7.1k net-short contracts to 16.1k contracts. Positioning is unlikely to have any factor on the Euro for the rest of October.

Meanwhile, Brexit news could help the GBP in the week ahead. All eyes will be on the key proposal meeting that arrives October 17th to 18th this week. On Monday, the United Kingdom Brexit minister Dominic Raab is scheduled to go to Brussels. He’ll meet up with the European Union’s chief negotiator Michel Barnier. The expectation is that they will go over the final proposals to present to the E.U. leaders this coming week.

Progress towards a withdrawal deal would certainly help boost the Sterling this week. However, if there is no such progress, then the pound is likely to drop. Therefore, many traders will be awaiting the results of the mid-week proposal.