The light economic calendar today should keep FX markets range bound today. Asian equities were marginally stronger, after US equities ended weaker on Friday, despite broadly firm Q3 earnings reports and some better economic data. The sterling selling saw no respite in Asian session. The GBP was still the weakest among all currencies, as the lingering effect of the UK posting 3Q GDP figures, which shows that the UK is still in recession after posting negative GDP for the sixth straight quarter, is still present. We are still in the minority in expecting that the BoE will expand its asset purchasing programming roughly by £25bn at the November meeting. Should the MPC members choose this course of action, traders should expect a significantly weaker sterling.
One of the highlight of this week will be the Norges Bank rate decision Wednesday. Markets expect the central bank to join the RBA in tightening rates. However, should the statement indicate gradual tightening over aggressive action, the market would be clearly disappointed. We believe any dip in the NOK is a good time to establish long positions.
Later today, we get the Dallas Fed Manufacturing Activity reading, which is expected to print a -0.5% decline. If so, this would be the slowest rate of decline seen in 2 years.
|G10 Advancers and Decliners vs USD|
R 2: 0.9476
R 1: 0.9347
S 1: 0.9113
S 2: 0.8985