The US dollar traded erratically last week as US President Donald Trump's repeated criticism of US monetary policy under Federal Reserve Chair Jerome Powell raised fresh concerns over the future independence of the US central bank.
Last week's key rate movements
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GBP/EUR – Unchanged on the week
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GBP/USD – Down 0.5% on the week
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EUR/USD – Down 0.5% on the week
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AUD/USD – Down 1.1% on the week
Pound (GBP)
The release of the UK's latest PMIs will likely be the primary focus for GBP investors this week. Expect to see the pound (GBP) catch some bids if July's preliminary index reports service sector activity continues to improve.
Euro (EUR)
The European Central Bank's (ECB) latest interest rate decision will serve as the primary catalyst for the euro (EUR) this week. The ECB is widely expected to leave its monetary policy untouched for the first time in a year, with the single currency poised to rise if the bank also signals rates are nearing their neutral level.
US dollar (USD)
The US central bank may remain in focus this week, with a speech by Federal Reserve Chair Jerome Powell scheduled for Tuesday. If he remains defiant in the face of Trump's calls for immediate rate cuts, the US dollar (USD) will likely strengthen.
Australian dollar (AUD)
AUD investors will look to the minutes from the Reserve Bank of Australia's (RBA) latest policy meeting for direction this week. If the minutes highlight policymakers' cautious approach to future rate cuts, expect to see the Australian dollar (AUD) rise.
South African rand (ZAR)
South Africa's latest consumer price index is forecast to report an uptick in inflation last month. The South African rand (ZAR) may climb in response if this is seen as weakening the case for further interest rate cuts from the South African Reserve Bank (SARB).
Canadian dollar (CAD)
In addition to ongoing US-Canada trade uncertainty, the Canadian dollar (CAD) may also be pressured by Canada's latest retail sales figures this week, as economists predict another slump in consumer spending last month.
New Zealand dollar (NZD)
Following a softer-than-expected domestic inflation print at the start of the week, the New Zealand dollar (NZD) may struggle to attract support amid Reserve Bank of New Zealand (RBNZ) rate cut bets and weak risk appetite.
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