Global Themes

Currency markets are heading into a highly uncertain period next week in which a number of high profile interest rate decisions and economic reports could cause, potentially, some more sizable exchange rate moves. The EUR/USD exchange has fallen by a huge 8.8 percent since October 15th before the ECB’s rate decision and President Mario Draghi’s press conference on Thursday, December 3rd. The Pound is currently still sliding towards the critical $1.50-1.48 price range against the US dollar before next Thursday’s UK services PMI report and Friday’s US non-farm payrolls data. Australia, Canada, India, Poland and the Euro Zone will all make interest rate announcements next week before the UK and US make their announcements on Dec 10 and Dec 16 respectively.

GBP

The Pound has traded within a 3.23 percent price range over the past 2 months against the US dollar but is currently still sliding towards the critical $1.50-1.48 price range ahead of next week’s important trading points. Next week investors will study the latest UK services and manufacturing PMI surveys before Friday’s US non-farm payrolls report. However, the most important event risk which is expected to influence the GBP/USD rate is likely to be Thursday’s ECB rate decision.

USD

The US dollar is still holding close to its strongest point since 2003 against a basket of currencies, supported by a huge 8.8 percent rally against the Euro over the past 29 days. The move comes before a critical European Central Bank rate decision on Thursday December 03 before Friday’s US non-farm payrolls report. Last month’s ‘blockbuster’ US payrolls sparked a sharp rise in the cost of buying US dollars.

EUR

The Euro is on course to set its biggest monthly loss against the US dollar since March before next week’s so-called ‘make-or-break’ ECB monetary policy decision on December 03. The EUR/USD exchange rate has now fallen by a huge 8.8% since October 15. Next Thursday the ECB is widely expected to cut interest rates before President Mario Draghi hosts a press conference in which he will explain the bank’s latest decision and new economic forecasts.