There are few signs of reprieve for the euro this week as France's debt crisis trundles on, with the government's latest budget likely to face stiff resistance in parliament.
Last week's key rate movements
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GBP/EUR – Up 0.4% on the week
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GBP/USD – Unchanged on the week
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EUR/USD – Down 0.4% on the week
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AUD/USD – Up 0.5% on the week
Pound (GBP)
The UK’s latest monthly GDP report could apply pressure to the pound (GBP) this week amid forecasts for a contraction in August, although a series of speeches by Bank of England (BoE) policymakers may offset any weakness if a hawkish consensus strengthens interest rate hike bets.
Euro (EUR)
The ongoing turmoil in France's bond market will likely continue to drive movement in the euro (EUR) this week, with further losses likely as the government's budget faces significant opposition when it is debated in parliament this week.
US dollar (USD)
The US consumer price index will be in the spotlight this week. An expected rise in inflation could trigger a fresh move higher for the US dollar (USD) if it underpins bets for a Federal Reserve interest rate hike in December.
Australian dollar (AUD)
The focus for AUD investors this week will be Australia’s latest jobs report, with the Australian dollar (AUD) potentially softening if a slowdown in employment growth dampens bets for further monetary tightening from the Reserve Bank of Australia (RBA).
South African rand (ZAR)
In the absence of any notable domestic data, movement in the South African rand (ZAR) is likely to be linked to risk sentiment and global energy prices this week, with elevated oil prices potentially weighing on ZAR.
Canadian dollar (CAD)
In addition to oil prices, the Canadian dollar (CAD) may also be influenced by a speech from Bank of Canada (BoC) Governor Tiff Macklem this week, with the 'loonie' likely to stumble if he remains cautious regarding the potential for future interest rate hikes.
New Zealand dollar (NZD)
The New Zealand dollar (NZD) will be driven by wider market trends this week amid a lull in NZD economic releases. If investors remain broadly risk-averse, the 'kiwi' is likely to suffer.
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