by Korman Tam
The currency market has much to digest this week as traders look ahead to monetary policy decisions from several central banks, including the BoC, RBA, BoE and ECB. The greenback relinquished some of last week’s gains in early Monday trading, slipping against the sterling and yen. The major currency pairs will likely be dictated by a combination of sentiment over global interest rate differentials as well as any new revelations from the subprime debacle and credit crisis.
Fed Chairman Bernanke’s comments last week heightened market expectations for a December rate cut. It remains unclear however, whether the anticipated ease will be a 25-bp or 50-bp cut. The economic reports over the coming week will be particularly important with the FOMC deliberating policy next Tuesday. In the session ahead, traders will look ahead to the November manufacturing ISM – forecasted to slip to 50.5 from 50.9. The main highlight this week will be Friday’s labor report, with non-farm payrolls forecasted to drop sharply in November to 75.0k, versus 166.0k from October.
Sterling Propped Higher By Manufacturing Data
Fed Chairman Bernanke’s comments last week heightened market expectations for a December rate cut. It remains unclear however, whether the anticipated ease will be a 25-bp or 50-bp cut. The economic reports over the coming week will be particularly important with the FOMC deliberating policy next Tuesday. In the session ahead, traders will look ahead to the November manufacturing ISM – forecasted to slip to 50.5 from 50.9. The main highlight this week will be Friday’s labor report, with non-farm payrolls forecasted to drop sharply in November to 75.0k, versus 166.0k from October.
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