Amid the current environment, it has been difficult to look beyond the dollar on the whole, however, notable performances have been logged by GBP, NZD and CHF over the past week. Focus will remain on these currencies next week, as markets not only concentrate on how to price central bank tolerances to inflation but also global growth conditions as Covid cases begin to rise and force major nations to impose tighter containment measures. On top of that, Swiss sight deposit data will be scrutinised as EURCHF traded questionably stable around the 1.05 level for most of this week, while Bank of England speakers will also be heavily followed as markets position for December’s meeting but remain cautious of previous miscommunications. Finally, the RBNZ is expected to hike rates again by 25bps, but the main focus will be on their implied tightening path amid the latest inflation expectations report. Risks of a 50bps aren’t immaterial, however.
Read Monex’s Week Ahead here:
Simon Harvey, Senior FX Market Analyst