United States Dollar:
All eyes continue to focus on Thursday’s Scottish independence referendum, with the vote expected to bring a narrow victory for the ‘No’ campaign. The pound continues to be depressed given the uncertainty of the outcome, with GBP/USD dropping below 1.62 this morning. All the main Westminster political parties have pledged more powers to Scotland, with the Daily Record running a front page article signed by David Cameron, Ed Miliband and Nick Clegg with the headline ‘The Vow’. This morning has seen UK CPI fall 0.1% to 1.5%, as expected. GBP/USD currently trades at 1.6168 with large swings forecast when the first election exit polls are released on Thursday. Tomorrow morning sees UK unemployment data, and the release of minutes from the last MPC meeting. This afternoon brings the monthly PPI release from America which is expected to show a 0.1% monthly increase. The main risk event from the States this week will be tomorrows FOMC rate announcement and the accompanying press conference and economic projections. Part of the projections will be Fed members’ expectations for interest rates, which are expected to rise in the US. Given the recent good run of data, some members are expected to bring forward the date of the expected first hike.
Euro:
In the absence of any data so far this week, EUR/USD has traded between 1.28 and 1.29 and currently sits at 1.2942. The first top tier data release of the week from the eurozone is this morning’s monthly German ZEW Economic Sentiment report. The report has fallen every month this year on the back of the ongoing tensions between Ukraine and Russia, and is expected to print its lowest reading since late 2012. GBP/EUR currently trades at 1.2490. Aussie and Kiwi Dollars: The Aussies recent fall seems to have bottomed out over the past 24 hours, with AUD/USD finding support around the .90 level. Poor Chinese data and falling consumer confidence kick-started the fall, with a further drop expected if the FOMC release is overly hawkish and if Scotland votes in favour for independence. AUD/USD currently sits at .9005 and GBP/AUD is at 1.7956. NZD/USD has mirrored the Aussies slump and currently trades at .8155, with GBP/NZD at 1.9830.
Data releases for the next 24 hours:
AUD: No data
EUR: German ZEW Economic Sentiment
GBP: Average Earnings Index 3m/y; Claimant Count Change; MPC Meeting Minutes
NZD: Current Account
USD: PPI m/m
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