The US dollar trended broadly higher last week as US President Donald Trump sowed further confusion over his trade policy, both delaying his tariff deadline while raising tariff levels against several US trading partners.
Last week's key rate movements
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GBP/EUR – Down 0.3% on the week
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GBP/USD – Down 1% on the week
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EUR/USD – Down 0.7% on the week
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AUD/USD – Up 0.4% on the week
Pound (GBP)
The pound (GBP) should see some notable movement this week with the publication of the UK's latest CPI and employment figures. The latter could be of particular note, after Bank of England (BoE) Governor Andrew Bailey suggested the bank could accelerate its interest rate cuts in response to a rapid cooling in the labour market.
Euro (EUR)
The euro (EUR) could face an uphill battle this week as EU-US trade negotiations threaten to be derailed by US President Donald Trump's announcement over the weekend that all goods from the EU will face a 30% tariff from 1 August.
US dollar (USD)
The latest US consumer price index will be closely watched by investors this week. An expected acceleration in inflation last month might dent Federal Reserve rate cut bets and bolster the US dollar (USD).
Australian dollar (AUD)
The publication of Australia's latest jobs report may act as a key catalyst of movement for the Australian dollar (AUD) this week, with the 'Aussie' poised to fall if employment growth remained weak last month.
South African rand (ZAR)
Another expansion in domestic retail sales may offer support to the South African rand (ZAR) this week. Although any gains are likely to be modest in scope amid the uncertainty over US trade policy.
Canadian dollar (CAD)
Trade friction between the US and Canada is likely to remain a sore spot for the Canadian dollar (CAD) this week, although an expected uptick in domestic inflation could lend CAD exchange rates some support.
New Zealand dollar (NZD)
In the absence of any notable domestic data, movement in the New Zealand dollar (NZD) is likely to be tied to market risk dynamics this week. If investors remain cautious, the 'kiwi' will likely weaken.
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