Global Themes

Several Federal Reserve members will be speaking this week, including Dennis Lockhart today at 18:00 followed by Fed Chair Janet Yellen on Thursday evening. These updates may give traders a little more insight into why the US decided against raising rates last week. Data-wise, US home sales figures today at 15:00 are expected to be weak while Thursday’s US durable goods report is expected to show a two percent drop in August.

GBP

Tomorrow at 19:30 Bank of England (BOE) Deputy Governor Minouche Shafik will be speaking and any comments about a future UK rate rise could give Sterling another lift against the US dollar. GBP/USD has gained by nearly 1.6 percent since last week’s decision by the US not to raise rates. This relief rally may continue into this week, with some technical indicators ‘suggesting’ Sterling could rise further towards year-to-date highs.

EUR

Over the past 2 months, the Euro has appreciated by 4.8 percent against Sterling and by nearly 4.5 percent against the US dollar. The gains come as China’s economic risks and the subsequent drop in global inflation expectations stand in the way of both the BOE and Fed in their plans to raise rates. By default the Euro has benefited from GBP and USD selling and recouped earlier losses. On Wednesday this week at 14:00 President Mario Draghi speaks. The European Central Bank (ECB) President may attempt to talk down the Euro in order to keep stimulating the Euro Zone’s economic recovery with a weaker currency.

NOK

Norway could cut interest rates one more time this Thursday, as an ongoing slump in oil prices erodes business confidence and keeps unemployment at a 10-year high. However, if the Norges Bank suggests the worst may be over, this could allow Norway’s currency to rally. The Nokkie has bounced back by 3.2 percent since hitting 2004 lows against Sterling last month.