The US dollar slid to the weakest level since
February as investor appetite for riskier assets rose on bets the Federal
Reserve will delay tapering stimulus into 2014. The U.S. dollar index, which
monitors the greenback against 10 other major currencies, fell by 1% last week.

The US dollar slid to the weakest level since
February as investor appetite for riskier assets rose on bets the Federal
Reserve will delay tapering stimulus into 2014. The U.S. dollar index, which
monitors the greenback against 10 other major currencies, fell by 1% last week.

Further fuelling global risk appetite was the
positive news from the Chinese economy. It grew by 7.8% in the third
quarter of 2013, accelerating from the 7.5% in the second quarter. This was
driven by stronger domestic and overseas demand for Chinese goods and services.
Positive news from the from China leads to a sell-off in USD as investors see
the US as a “safe haven”.

This was all reflected in stock markets across the
globe as many indices reached highs not seen since the credit crunch. The
MSCI All-Country World Index advanced 0.3% to 394.55, the highest since May
2008. 

We could be in for a choppy week as it is a busy
one for economic data, with a first glimpse of GDP growth in the third
quarter topping the list in the UK on Friday. In Germany, we get the IFO
business survey on Friday and euro zone PMIs on manufacturing and services
activity across the region are out on Thursday.

In the United States, after the shutdown held back
some key data from government departments, there is a flood coming this week,
top of the bill non-farm payrolls tomorrow. Also due out in the US
are existing home sales today, import and export price figures on Wednesday,
October jobless claims and PMI Manufacturing on Thursday and durable goods
orders on Friday.

Key Announcements: 

15.00pm – USD – Existing Home Sales (Sep): Expected
to fall to 5,370,000.