The euro may face significant selling pressure this week as a widely expected interest rate cut from the European Central Bank may be compounded by dovish forward guidance from the bank.
Pound (GBP)
Bank of England (BoE) Governor Andrew Bailey will testify before the Treasury select committee this week. Some analysts expect Bailey’s forward guidance will see some hawkish adjustment in the wake of recent UK wage growth and inflation figures, which may bolster the pound (GBP) in mid-week trade.
Euro (EUR)
The European Central Bank’s (ECB) latest interest rate decision will be centre stage this week. The ECB is widely expected to cut rates again following its March meeting, with the euro (EUR) poised to slump if the bank also signals more easing is needed.
US dollar (USD)
This week will see the publication of the latest US non-farm payroll report. A softening of the US labour market in February could apply some pressure to the US dollar (USD) at the end of the week. Although heightened geopolitical uncertainty and global trade tensions could keep USD exchanges buoyed in the meantime.
Australian dollar (AUD)
The release of Australia's latest GDP figures will likely dominate movement in the Australian dollar (AUD) this week. Expect to see the ‘Aussie’ strengthen if growth accelerated as forecast in the last quarter of 2024.
South African rand (ZAR)
South Africa will also publish its latest GDP figures this week. Analysts are predicting a sharp rebound in growth in the last quarter of 2024, which may underpin the South African rand (ZAR) through the first half of the week.
Canadian dollar (CAD)
US President Donald Trump’s 25% tariff on Canada is due to come into effect this week. Most investors seem confident that this will be averted by another last-minute deal, leaving significant downside risk for the Canadian dollar (CAD) if the tariffs come into effect.
New Zealand dollar (NZD)
In the absence of any notable NZD data releases, movement in the New Zealand dollar is likely to be tied to market risk dynamics this week. Expect to see the ‘kiwi’ sink if risk sentiment remains weak.
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