The Bank of England (BoE) and Federal Reserve are both scheduled to deliver their latest interest rate decisions this week. While no policy changes are expected, the banks’ forward guidance could be key in determining the direction of their respective currencies this week.
Pound (GBP)
The Bank of England is set to deliver its latest interest rate decision this week. GBP investors will be looking for more clarity on whether it might pursue an interest rate cut in May. If the bank strikes a hawkish chord, it could see the pound (GBP) accelerate.
Euro (EUR)
A key focus for EUR investors this week will be Germany’s latest ZEW economic sentiment index. This could lift the euro (EUR) if the recent optimism surrounding the country’s new defence and infrastructure spending plans helped boost sentiment this month.
US dollar (USD)
All eyes will be on the Federal Reserve when it delivers its latest policy decision this week. While the US central bank is expected to leave its monetary policy untouched, its forward guidance could trigger some notable volatility in the US dollar (USD), particularly if it addresses recent US recession fears.
Australian dollar (AUD)
Australia will publish its latest employment report later this week, with the Australian dollar (AUD) poised to soften if there are additional signs the domestic labour market is cooling.
South African rand (ZAR)
This week sees the South African Reserve Bank (SARB) deliver its latest interest rate decision. No policy changes are expected from the SARB this month, but its forward guidance could lift the South African rand (ZAR) if it strikes a hawkish tone.
Canadian dollar (CAD)
Canada’s latest consumer price index could help to underpin the Canadian dollar (CAD) in the first half of this week. An expected acceleration in domestic inflation last month is likely to weaken bets for another interest rate cut from the Bank of Canada (BoC) in the short-term.
New Zealand dollar (NZD)
The New Zealand dollar (NZD) may receive a boost this week, if New Zealand’s latest GDP figures show the country emerged from a technical recession in the last quarter of 2024.
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