Weekly Report

Highlights:

• EUR/USD : drops to one-week low
• GBP/USD : slips as BoE holds, hints at another rate cut
• USD/JPY : Edges up, mood still shaky after bond sell-off
• USD/CAD : Rises to 8-week highs after U.S., Canadian data
• Gold : Slumped to a more than two-week low
• Crude Oil : Jump on chatter of output freeze deal

EUR/USD

Keeps the neutral outlook ahead of ECB meeting.

The EUR/USD declined 0.68% to 1.1149, the lowest since September 6 as dollar extended gains to two-and-a-half week highs against the other major currencies, despite a disappointing U.S. consumer sentiment report as investors turned their attention to the Federal Reserve’s policy meeting scheduled next week. Euro's current drop comes following strong improvement in inflation prices in the U.S. in August, which bolstered the greenback and bashed the euro down. Euro wavered following weak U.S. data which forced the dollar into sideways trading and relieved the pressure on the euro. Downbeat U.S. retail sales data raised doubts in the markets over whether the Federal Reserve will hike rates in its next meeting, which relieved some pressure on the common currency.

EUR/USD

GBP/USD

slips as BoE holds, hints at another rate cut

Pound slid lower against the dollar after the Bank of England kept monetary policy on hold, but indicated that it could cut interest rates again unless the economy picks up. The central banks meeting minutes showed that it is less pessimistic about the outlook for the U.K. economy. “A number of indicators of near-term economic activity have been somewhat stronger than expected” since August’s rate cut, the minutes said, and the committee now expects less of a slowdown in growth in the second half of 2016. Earlier Thursday data showed that U.K. retail sales edged down just 0.2% in August decline and were 6.2% higher on a year-over-year basis. Sterling dipped having hit a two-week low as investors awaited a Bank of England policy decision. An appearance by Mark Carney and colleagues in parliament last week suggested the Bank would look through an improvement in some economic data which has given the pound support since it cut interest rates to record lows and reintroduced an asset-purchase program in August.

GBP/USD

USD/JPY

Edges up, mood still shaky after bond sell-off

The USD/JPY inched higher as investors' sought safe havens in the face of a shaky atmosphere on stock markets, though major currency pairs were otherwise little changed ahead of a round of central bank meetings. The yen move came despite an easing of the tensions on bond markets which have dominated the past week. Traders said sales of emerging market currencies by CTAs - largely model-based quantitative funds - continued to dominate trading by the bigger desks. Jobs data from Australia showed a surprise drop of 3,900 jobs in August for the employment change figures, compared to an expected 15,000 increase. Still, the unemployment rate dipped to 5.6%, below the 5.7% figure seen as the participation rate eased to 64.7% from 64.9%.

USD/JPY

USD/CAD

Rises to 8-week highs after U.S., Canadian data

The USD/CAD rose to eight-week highs against its Canadian counterpart, helped by the release of upbeat U.S. inflation data, while declining oil prices and a disappointing report on Canadian manufacturing sales weighed on the local currency. The commodity-related Canadian dollar was also hit by tumbling oil prices on Friday due to reports that Iran's August crude oil exports jumped 15% to a five-year high of more than 2 million barrels per day, sparking fresh concerns over a global supply glut. A separate report showed that Canada’s foreign securities purchases rose by C$5.23 billion in July, compared to expectations for an increase of C$10.12 billion and after a C$9.02 billion the previous month.

USD/CAD

Gold

Slumped to a more than two-week low

Gold prices slumped to a more than two-week low, as a broadly stronger U.S. dollar and jitters ahead of next week's highly anticipated Federal Reserve policy meeting weighed. The Labor Department said the consumer price index rose 0.2% in August, compared to expectations for a 0.1% gain. Year-over-year, consumer prices increased 1.1%. Excluding the volatile food and energy categories, so-called core consumer prices climbed 0.3%. The core CPI increased 2.3% in the 12 months through August. Investors are currently pricing in just a 12% chance of a rate hike next week, according to Investing. Com’s Fed Rate Monitor Tool. For December, odds stood at around 55%.

GOLD

Crude Oil

Jump on chatter of output freeze deal

Oil prices rose sharply during European hours on Monday, recovering from last week's steep declines, as traders continued to monitor developments before the informal meeting of major oil producing countries later this month. According to market experts, chances that the meeting would yield any action to reduce the global glut appeared minimal. Instead, most believe that oil producers will continue to monitor the market and possibly postpone freeze talks to the official OPEC meeting in Vienna on November 30.

London-traded Brent futures sank 82 cents, or 1.76%. Prices lost $2.04, or 4.67%, last week amid growing concerns over the possibility of returning crude supplies from Libya and Nigeria.