A Week in the Market: Calm is Key (21 – 25 November)

As the market shows, This week could be a relatively quiet one for the currencies, but it is worth keeping an eye on oil prices and the rhetoric of the Fed officials.

EUR: attention to ECB reports

Euro area firms are challenged by high inflation and energy prices, recession risks and tighter financial conditions. Also The ECB's tightening policy will have a positive effect on the EUR. The Eurozone will publish the November business activity indexes for the manufacturing and services sectors. Attention should be drawn to the reports of the previous European Central Bank meeting, as they may contain information on future fiscal moves.

NZD: rate hike continues

New Zealand's central bank will hike rates by 75 basis points for the first time ever on Wednesday to cool multi-decade high inflation, ramping up the speed of an already-aggressive monetary tightening campaign, a Reuters poll found. The Reserve Bank of New Zealand will meet and decide on the interest rate, which will likely rise from the current 3.5% per year. The RBNZ has previously stated its intention to raise the rate to gradually combat global inflation. For the NZD exchange rate, this is a favourable action.

USD: demand will continue

Demand for the dollar is usually high as it is the world's reserve currency. The US is preparing to release its real estate market data for October, and the parameters for durable goods orders. These reports will help to understand the structure of consumer spending. Demand for the USD could remain up-to-date.

JPY: avoiding devaluation

Japan will release the Tokyo core consumer price index, which is a leading indicator of the general inflation trend. The JPY has so far managed to avoid a return to devaluation, but this is likely to be temporary.

CAD: oil prices are important

When oil prices are high, the amount of U.S. dollars Canada earns on each barrel of oil it exports will be high. Canada will provide information on its retail sales and publish the housing price index. However, the focus will be on the behaviour of the US dollar, and the commodity price movements. Weakness in oil will put pressure on the CAD.