We saw some dramatic swings in most major currencies last week, with a global bond market selloff and abysmal US jobs data infusing notable volatility into the currency market, particularly the pound and US dollar.
Last week's key rate movements
- GBP/EUR – Down 0.3% on the week
- GBP/USD – Unchanged on the week
- EUR/USD – Up 0.3% on the week
- AUD/USD – Up 0.3% on the week
Pound (GBP)
The UK's latest GDP figures will be the main focus for GBP investors this week. Economists predict growth stalled at the start of the third quarter, piling more pressure on Chancellor Rachel Reeves and likely dragging on the pound (GBP) at the end of the session.
Euro (EUR)
The European Central Bank's (ECB) latest interest rate decision will act as the primary catalyst for the euro (EUR) this week, with the single currency likely to firm if ECB President Christine Lagarde signals the bank has concluded its current cutting cycle.
US dollar (USD)
Following on from last week's dreadful payroll numbers, USD investors will look to this week's US inflation figures to further guide Federal Reserve interest rate expectations. An acceleration of inflation could lead some traders to trim their rate cut bets and provide relief for the US dollar (USD).
Australian dollar (AUD)
The publication of Australia's latest business and consumer confidence figures could help to underpin the Australian dollar (AUD) this week if they report a continuing improvement in morale.
South African rand (ZAR)
South Africa will also publish its latest GDP figures this week. Economists forecast domestic growth will have accelerated in Q2, which may provide a boost for the South African rand (ZAR) on Tuesday.
Canadian dollar (CAD)
In the absence of any notable domestic economic indicators, movement in the commodity-linked Canadian dollar (CAD) is likely to track oil prices, potentially exposing the 'loonie' to losses if prices continue to soften.
New Zealand dollar (NZD)
While movement in the New Zealand dollar (NZD) will be primarily driven by risk appetite this week, a slowdown in New Zealand's latest manufacturing PMI could exert some pressure in the latter half of the session.
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