The US Dollar finally halted its decline last week, which was unexpected after disappointing US economic data. The Dollar Index (DXY) rose 0.7% to close the week up at 97.83.
The Euro turned over and remained under a lot of pressure before the ECB press conference. However, there was no real news in Mario Draghi’s last meeting as the ECB chairman and we now welcome Christene Laragarde as chairwoman. She will have a tough time on her hands following weak eurozone economic data. In light of this, EUR/USD finished the week trading below the all-important 1.11 mark.
The Pound was incredibly volatile again last week, however, the likelihood of a No-Deal Brexit is still considerably reduced, but the risk still remains as a No-Deal is still not completely off the table. Overall, the Pound gave back some of its recent gains and finished the week -1.2%, however traders are looking more towards the upside.
Another fairly quiet week on the Yen front, we saw a slight retreat but no real impulsive moves.
AUD & NZD
A fairly negative week for both pairs, which both fell around 0.7% on the week versus the USD, mostly driven by a stronger US Dollar.
Stocks showed more strength and it is still clear to us that the risk is for more upside gains. Fairly positive US-China trade talks and signs of progress from the EU/UK boosted equities higher. The S&P 500 finished the week hitting new all-time highs rising over 1.1% to 3021, the DAX gained 1.8% to close at 12886, and the FTSE100 finished 2.2% higher at around 7324.
The Week Ahead
The week ahead will have traders’ eyes focused on the all-important EU/UK and US/China deals once again. With the October 31st Brexit deadline quickly approaching and the most likely outcome being a further extension, yet again we will likely see a very volatile week ahead for both GBP and EUR.
On the macroeconomic front we have CPI releases from the Eurozone, Germany, Australia, Japan, and Switzerland. As well as this we have the important interest rate decisions from the US and Canada, ending the week with the US Nonfarm Payroll release Friday. Until next week, Happy Trading!