1. It was the first week that the Dollar closed weaker against all other major currencies, losing nearly 2% of its value versus GBP and falling more than 1% against AUD and NZD. Traders are now carful to assess how the USD will behave until the end of the year, as we approach the last FED rate meeting where a 70% chance of a rate hike is priced in already. Noteworthy is the fact, that despite decent US data, the last week (retail sales and consumer confidence) the USD was unable to rally past other currencies, indicating a loss of confidence as to the future pace of rate hikes (only one priced in for 2018)
2. As we enter this week, the GBP will face important news. After falling sharply from the 20 of September where GBP peaked over 1.36 VS the USD, the Pair has rebounded since then to 1.33+, on expectations that the BoE will raise rates, and that the UK will be granted a 2 yr. Brexit transition period. This week is an important one, as the BoE will release rates, inflation, employment and consumer spending numbers.
3. The euro was on the defensive early on Monday after Austria’s election and on concerns over Catalonia’s confrontation with Madrid, though the dollar also lacked momentum after soft U.S. inflation data. Still, the fall in the common currency was limited as investors expect the European Central Bank to unveil a plan later this month to start tapering its bond buying scheme.
4. Gold prices edged up to $1304 in Asia on Monday with tension in the Middle East supporting risk demand as Baghdad moved troops into the oil-rich Kirkuk region where the Kurdish Regional Government has a stronghold and has mulled a push for independence opposed by Iraq, Iran and Turkey. Last week, gold prices rose on Friday as weaker-than-expected U.S. inflation data added to doubts over the Federal Reserve’s plans to raise interest rates once more this year.
5. Oil markets jumped on concerns over potential renewed U.S. sanctions against Iran as well as conflict in Iraq, while an explosion at a U.S. oil rig and reduced exploration activity supported prices there. U.S. President Donald Trump last Friday refused to certify that Tehran is complying with the accord even though international inspectors say it is.