For the Dollar:

It’s a busy week ahead on the economic data front. In the 1^st half of the week, November retail sales and December private sector PMIs are due out, along with industrial production and NY Empire State Manufacturing figures. Expect retail sales and service sector PMIs to be the key drivers on Tuesday and Wednesday. The focus will then shift to Philly FED Manufacturing PMI and weekly jobless claims figures on Thursday. Expect the initial jobless claims figures to garner the greatest interest in the day. On the monetary policy front, the FED is also in action on Wednesday. While the FED is expected to leave interest rates unchanged, an expansion to the bond purchasing program could be on the cards. Also of interest, however, will be the FED’s interest rate projections and economic projections. The Dollar Spot Index ended the week up by 0.30% to 90.976.

For the EUR:

It’s a busy week ahead on the economic data front. In the 1^st half of the week, October industrial production figures for the Eurozone and finalized inflation figures from Italy and France are due out. Expect industrial production figures to have the greatest influence. Mid-week, the focus will shift to prelim December private sector PMI numbers for France, Germany, and the Eurozone. Expect plenty of influence from the PMI numbers, with any deterioration likely to weigh on risk sentiment. In the 2^nd half of the week, German IFO Business Climate index figures for December will also influence on Friday. Away from the economic calendar, chatter from Capitol Hill, Brexit, and COVID-19 vaccination news will also provide direction. The EUR ended the week up by 0.07% to $1.2112.

For the Pound:

It’s a busy week ahead on the economic calendar. In the 1^st half of the week, claimant count, wage growth, employment change, and unemployment figures are in focus. Expect claimant counts and the unemployment rate to be the key drivers. Mid-week, November inflation figures will also garner interest ahead of a busy 2^nd half of the week. November retail sales figures are due out, which will draw plenty of interest. The main event of the week, however, is the BoE monetary policy decision on Thursday. There has been the talk of negative rates, the markets will get an idea of what to expect, particularly with some degree of clarity on Brexit by Thursday…

In the following week, while the markets are expecting the BoE to leave rates unchanged, forward guidance will, therefore, be key. The Pound ended the week down by 1.61% to $1.3224. Late into the day on Friday, lawmakers extended federal funding for another week. While averting a government shutdown, there was a failure to deliver a stimulus package. With the U.S continuing to reel from the rising number of COVID-19 cases, labor market conditions have deteriorated. Progress in the week is going to be needed as will a resolution to government funding before Christmas. On the COVID-19 vaccine front, the FDA is also due to review the Moderna Inc. vaccine in the week ahead. Expect more pressure from the Whitehouse to deliver a much-needed 2^nd vaccine.

Brexit

In this week, Sunday’s Brexit deadline will decide the near-term fate of Britain and its trade terms with the EU. With key differences remaining and limited time to resolve the remaining issues, expectations are for talks to continue in the New Year should both sides fail to reach an agreement ahead of the Sunday deadline. While the hope of an eventual deal could limit the damage there will likely be some fallout from a no-deal Brexit.