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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.
United Kingdom
Finance and Banking
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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
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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