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UK trade, Canada jobs eyed - RBS

FXStreet (Bali) - FX Strategists at RBS, highlight international trade numbers for the UK and Canadian employment report as the main risk events to bear in mind for Friday.

Key Quotes

"Friday sees the release of international trade numbers for the UK. These have the potential to provide a timely reminder of shaky UK fundamentals. Higher yields have supported the currency over the past year while reducing focus on longer-term structural issues. But recent data have hinted at the prospect of a prolonged period of subdued inflation in the UK. There has also been evidence of a slowdown in the manufacturing sector. These developments have seen the market begin to push back its expectations for a first rate hike. As yields fall, there is potential therefore for focus to shift back to noisy politics and the triple imbalances. We look for continued GBP trade-weighted underperformance."

"Employment numbers will be the main data point to watch in Canada this week. Recent weak trade data have given the Bank of Canada plenty of ammunition to stay cautious in their October meeting and forecast round. Recent comments from BoC Deputy Governors also underpin our view that the BoC will be unwilling to shift to a less dovish outlook any time soon. While the CAD may prove to be an outperformer on the crosses
as the US continues to be a global growth leader, we remain solidly bullish USD/CAD. The 2014 high 1.1279 is the next major topside resistance."

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