Home Opinion/Analysis Market Forecasts. Politics, Oil and Monetary Policies to Influence Currencies This Week

Market Forecasts. Politics, Oil and Monetary Policies to Influence Currencies This Week

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The British pound will remain near 30-year lows, as the coming week is filled with potential market influences that will work against the currency. Bank of England’s Governor Carney is under pressure as politicians urge his replacement.

The BoE will discuss the country’s quantitative easing program on Thursday. The QE program is expected to remain unchanged.

The pound has weakened since the last policy meeting in August. Higher crude oil prices mixed with a weakening pound will influence the country’s domestic inflation. Domestic inflation is expected to be revised upward.

Politics will play a major role in the stock markets this week.

In the United States, reports that new emails of importance relating to Hillary Clinton’s email scandal have caused the nominee’s poll numbers to fall. The announcement and rising poll numbers for her opponent Donald Trump will have an impact on stock prices in the United States going into the general election on November 8.

The S&P 500 is up 0.17%, the DJI is up 0.14% and the NASDAQ is up 0.23% in midmorning trade on Monday.

The United Kingdom’s FTSE 100 is down 0.56%. France’s CAC 40 is down 0.87%, Germany’s DAX is down 0.42%, the Tel AVIV 25 and 100 are down 0.22% and 0.31% on the day. The Nikkei 225 ended the day down 0.1%.

Traders in currency pairings are urged to use CFDs to their advantage this week.

OPEC uncertainty is expected to spill over into the markets and currencies this week. Oil prices have continued to decline since Friday morning. News that non-OPEC didn’t come to a specific commitment over the weekend to join OPEC to limit output levels weighed on the commodity.

Officials for OPEC and non-OPEC members met on Saturday. The meeting ended with an agreement to meet on November 30 with no further commitment agreed upon. A spokesperson for Opteck, stated, “If OPEC doesn’t come to an agreement to cut production, expect a severe decline in oil prices in December.”

Brent crude is trading down 3% on the day, trading at  $49.16 a barrel on Monday.

Germany’s decline in retail sales is expected to cause the euro to suffer on the week. Retail sales in the strongest European Union economy fell for the second straight month last month. Global economic uncertainties are to blame for the fall in sales.

Sales, when seasonal swings and inflation are considered, fell 1.4% in September to mark the strongest one-month fall in the last two years.

Analysts expected retail sales to increase by 0.2%.

German retail sales are prone to revisions, so we expect that a future announcement of a revised figure will be made.

The BoE, Bank of Japan and the Reserve Bank of Australia will all meet this week to discuss policies.