Fresh concerns over the future independence of the Federal Reserve infused volatility into the US dollar last week, after US President Donald Trump sought to remove Fed Governor Lisa Cook.
Last week's key rate movements
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GBP/EUR – Up 0.2% on the week
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GBP/USD – Unchanged on the week
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EUR/USD – Down 0.3% on the week
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AUD/USD – Up 0.7% on the week
Pound (GBP)
The only GBP data of note this week will be the UK’s latest retail sales figures, which could put pressure on the pound (GBP) on Friday if they show that consumer spending softened in July.
Euro (EUR)
The euro (EUR) could receive an early boost this week with the release of the Eurozone’s consumer price index. August’s preliminary figures are forecast to report inflation continued to hold at 2%, likely helping to underpin bets the European Central Bank (ECB) is nearing the end of its cutting cycle.
US dollar (USD)
Dominating movement in the US dollar (USD) this week will be the release of the latest US non-farm payroll report. Another reading below 100,000 will fuel concerns the US labour market is slowing, dragging the ‘greenback’ lower as it compounds bets for multiple interest rate cuts from the Federal Reserve through the remainder of 2025.
Australian dollar (AUD)
Australia’s latest GDP figures may give the Australian dollar (AUD) a shot in the arm this week, with consensus estimates predicting a healthy bump in economic growth in the second quarter.
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) in the middle of the week.
Canadian dollar (CAD)
Canada’s latest employment figures will be in the spotlight for CAD investors this week. If unemployment rose as forecast in August, we are likely to see the ‘loonie’ shed support through the end of the week.
New Zealand dollar (NZD)
In the absence of any notable domestic data, movement in the New Zealand dollar (NZD) is expected to reflect wider market trends this week. If a cautious mood prevails, the ‘kiwi’ will likely falter.
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