The minutes of the monetary policy meeting of the federal Reserve and the european central Bank will be the centre of attention this week, as investors continue to monitor the effects of the recent relaxation of the central bank in an environment of commercial uncertainty and slower global growth.
The interventions of several speakers from the Fed and the speech of the president of the ECB, Christine Lagarde, will also be closely monitored in order to detect any information on the monetary policy as the trade discussions between the United States and China will advance. During this time, a wave of global data PMI on Friday will be under a magnifying glass to check for any new sign of fallout from the trade war.
The dollar depreciated on Friday, by the end of the day due to a certain optimism for the ongoing trade negotiations with China, which has stimulated the foreign currency related to trade as the euro and the pound sterling.
The u.s. commerce secretary, Wilbur Ross, said that progress had been made in regards to the details of the agreement, which had contributed to the rise of the currencies exposed to trade to the detriment of safe-haven assets such as the japanese yen.
The dollar depreciated 0.3% against the euro and 0.2% against the pound sterling, to 1,1051 and 1,2905 respectively. It was up 0.3% versus the yen, last at 108,73, after the rise of the safe-haven currency earlier in the week, the political unrest in Hong Kong and the commercial uncertainty has reduced the appetite for risk. The swiss franc has also weakened 0.2% against the dollar.
“This may not be a factor of change,” said Terence Wu, a strategist of cash and cash equivalents, bank OCBC in Singapore.
The mixed signals on the trade negotiations have been numerous these last few days, while the evidence of the damage that the dispute due to the global economy continue to accumulate.
Friday, the Commerce department announced that retail sales in the U.s. rebounded in October, but that consumers have reduced their purchases of household items and clothing expensive, which raises questions about the strength of the consumer that underlies currently the u.s. economy.
This may have also contributed to the rise of the euro and the pound sterling.
“When we look at the second quarter figures for Europe and the Uk, these figures were very worrying, but now that we look at the figures in the third quarter, their progress has been a little better, and the pace has been consistent with or above expectations, while the United States have slowed, said Mr. Perez.
“The dollar is reacting finally today on these figures and said that the economic rhythm of the United States is not so fast.”
As a new week starts, Investing.com has compiled a list of significant events likely to affect the markets.
Tuesday, November 19,
Australia – minutes of the meeting on monetary policy
Canada – manufacturing Sales
USA – building Permits ; housing starts ; Williams, a member of the FOMC, takes the word
Wednesday, November 20,
Financial stability review of the ECB
Canada – CPI
Minutes of the FOMC meeting
Thursday, November 21,
Minutes of the meeting of the ECB
USA – Index of the Philadelphia Fed ; initial claims for unemployment insurance ; sales of existing homes
Friday 22 November
Japan – manufacturing PMI Flash CPI
Intervention by Lagarde, president of the ECB
Euro area – Imps of manufacturing and services Flash
Canada – retail Sales
USA – manufacturing PMI and services Flash
–Reuters contributed to this report.