GBP/USD back above 1.61 as stocks recover

United States Dollar:

Following comments from the Bank of England’s Andrew Haldane, who said that interest rates could stay low for a longer period of time, the pound fell on Friday. He said that “recent evidence, in the UK and globally, has shifted my probability distribution towards the lower tail… in rather plainer English, I am gloomier”. GBP/USD fell to 1.6030 following these comments. It then recovered during the afternoon session as US economic data, Building Permits and UoM Consumer Sentiment printed relatively positively. U.S. and global stocks recovered as risk sentiment slowly improved after the data releases and GBP/USD pushed back above 1.61. Fed Chair Yellen also spoke on Friday, but steered clear of monetary policy. This week, attention will switch to the MPC minutes. In particular, we’ll see if all members are as dovish on the potential for interest rate hikes during the first part of next year as Haldane is. UK GDP is due later in the week. In addition, manufacturing data from the EU will be released which will no doubt grab some attention. US CPI will be the biggest data release from across the pond.

Euro:

EUR/USD trickled lower on Friday from 1.2835 to 1.2745. It then continued to drift lower early this morning. There was plenty of rhetoric from ECB officials on Friday and very little of it was all that positive. There was little by way of economic data so investors took the lead from such comments as “the ECB may have to revise down EZ 2015 GDP forecasts” from Ewald Nowotny. The single currency has also lost ground vs. the pound and GBP/EUR is back above 1.26 this morning at 1.2630.

Aussie and Kiwi Dollars:

AUD and NZD have both been pretty steady since Friday and trade at .8765 .7950 vs. the USD respectively. The RBA’s assistant governor Kent was speaking overnight and said that the central bank needs to keep inflation low and stable, and that monetary policy was set to support growth in the Australian economy. It’s a big week for the Aussie – Chinese GDP and Industrial Production are due tonight, so are RBA Monetary Policy Meeting Minutes. Later on in the week, Australian CPI is due. Meanwhile, both GBP/AUD and GBP/NZD are both steady and trade at 1.8390 and 2.0280 respectively.

Data releases for the next 24 hours:

AUD: Monetary Policy Meeting Minutes

EUR: German PPI m/m, German PPI m/m, German Buba Monthly Report

GBP: No data

NZD: Visitor Arrivals m/m

USD: No data