It’s a big week for the US Dollar and Sterling

With little data released on Friday, the markets were focused on the meeting of G20 finance ministers in South Korea; so what did we get from the G20?

The overall committment was that the G20 would be "viligant against excess volatility" to "mitigate" capital flows to emerging countries. There were no concrete policy changes announced, which is no surprise, but it marked a move closer to international policy co-ordination, which is positive for market confidence.

It is a critical week for both Sterling and the US Dollar, where the markets will be casting critical eyes over the release of Q3 GDP figures for evidence of economic deterioration and the increased likelihood of further stimulus. The US Dollar continues to show signs of a possible rebound as it continues to hold above key trend line support.

The release of US Q3 GDP on Friday where a figure of 2.2% is expected will in all likelihood be a key indicator of what sort of measures the Fed may embark on at the conclusion of its next meeting on November 3rd.

Sterling is also set for a key week with the release on Tuesday of Q3 GDP as well, where expectations are for a slip back to a figure of 0.4%, a considerable decline from the last quarter. A figure around this level would give further ammunition to members of the Bank of England's monetary policy committee (MPC) who advocate for a further round of quantitative easing (QE) into the UK economy, inevitably sending Sterling lower.