BREAKING: Forex Weekly Outlook: U.S. Dollar Remains Under Pressure

Investors continue to show a tolerance for risk, despite the resurgence of Covid-19. This sentiment has weighed on the U.S. dollar. The focus this week will be on Purchasing Managers' Index (PMI), as well as Gross Domestic Product (GDP) releases in the U.S. and Japan.

Eurozone's inflation remains weak, reflective of poor economic conditions in the eurozone. Headline Consumer Price Index (CPI) declined by 0.3%, while core CPI gained 0.2%. Both figures confirmed the initial readings.

In the U.K., inflation improved in October and beat the forecast. Headline CPI improved from 0.5% to 0.7%, while the core reading climbed from 1.3% to 1.5%. Retail sales slowed from 1.5% to 1.2%, but crushed the estimate of -0.3%. Negotiations continue between London and Brussels on a Brexit deal, with the markets optimistic that an agreement will be reached shortly.

Japan’s GDP declined by 7.8% in the second quarter, but rebounded in the third quarter and posted a gain of 5.0%

Australia created an impressive 178,800 jobs in October, defying the forecast of 26,700 However, the unemployment rate edged up from 6.9% to 7.0%.

1. Eurozone PMIs: Monday, 7:15 in France, 7:30 in Germany, and 8:00 for the whole Eurozone. German and Eurozone manufacturing PMIs continue to point to expansion, with readings above the neutral 50-level. However, the October readings are expected to fall. The estimates are 56.0 for Germany, 53.2 for the eurozone and 50.2 for France. The services sector has been in contraction and the October readings are expected to drop even further. The forecasts for Germany is 46.1, for the eurozone 42.2 and for France 39.2.
2. U.K. Manufacturing PMI: Monday, 9:30. Manufacturing PMI has been slowing down, but still remains in expansionary territory, with readings above the neutral-50 level. The estimate for October stands at 50.5 points.
3. U.K. Services PMI: Monday, 9:30. The services sector has been slowing and dropped to 52.3 in October. Analysts are bracing for a sharp drop in November, with an estimate of 43.2 points, which would indicate contraction.
4. Germany Final GDP: Tuesday, 10:00. After a decline of -9.7% in the second quarter, analysts expect the German economy to rebound in the third quarter, with an estimate of 8.2%.
5. U.S. GDP: Wednesday, 13:30. The U.S. releases second estimate GDP for the third quarter. The forecast stands at 33.1%, unchanged from the initial estimate.
6. The Federal Open Market Committee (FOMC) Minutes: Wednesday, 19:00. The minutes of the Federal Reserve’s November meeting will provide details of the meeting and could shed light on any plans by the Federal Reserve to ease monetary policy.
7. European Central Bank (ECB) Monetary Policy Meeting Accounts: Thursday, 15:00. The ECB will release the minutes of its October policy meeting. Investors will be looking for clues whether the ECB is planning additional easing before the end of the year.

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