The Euro was under pressure on Monday ahead of a European Central Bank meeting later this week, at which policymakers are expected to deliver a new stimulus to bolster a flagging regional economy.
Heightened expectations for an ECB easing come as other global central banks move to loosen the monetary spigot, including the People’s Bank of China, which on Friday, cut the amount of cash that banks must hold as reserves.
The European Central Bank is all but certain to approve new stimulus measures on Thursday to boost an ailing economy, but the composition of its package is far from clear, as a rift has opened between hawkish Northern European policymakers and doves from the south.
Data due later on Monday about German exports could provide further clues about the health of the global economy. Policymakers are rushing to bolster growth as a wide-ranging dispute between the United States and China over trade policy drags into a second year, increasing the risk of recession.
Irish Prime Minister, Leo Varadkar, plans to discuss whether regulatory alignment between Ireland and Northern Ireland might form the basis of a Brexit deal when he meets British counterpart, Boris Johnson, on Monday.
Varadkar said a breakthrough was unlikely during Monday’s talks with the EU summit on Oct 17th-18th, providing the most likely venue for any agreement.
Talks to secure an orderly British exit from the European Union have floundered on the question of how to avoid infrastructure along the border between EU member, Ireland, and the British region of Northern Ireland.
The so-called “backstop” protocol in the current withdrawal agreement mandates regulatory alignment between Ireland and the whole of the United Kingdom, which Brexit supporters say would complicate new trade deals.
The dollar was marginally lower on Friday against a basket of currencies, holding above a one-week low as a mixed report on the U.S. jobs market in August reinforced the view of a slowing expansion and chances of more interest rate cuts from the Federal Reserve.
Fed Chair, Jerome Powell, did little to ruffle those expectations. At an overseas event on Friday, he cited risks, in particular U.S.-China trade tensions that may derail the current U.S. economic expansion, which is the longest one on record.
The U.S. Labor Department said domestic employers hired 130,000 workers in August, fewer than the 158,000 forecast among economists polled, while hourly wages grew 0.4% last month, a tad faster than the 0.3% increase projected by analysts.
09.30 – GBP: GDP MoM; forecast at 0.1% against previous of 0.0%
09.30 – GBP: Manufacturing production MoM; forecast at -0.3% against previous of -0.2%