Most major currencies saw choppy movement last week, as Middle East tensions and high-impact economic data infused markets with volatility.
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 0.1% on the week
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AUD/USD – Down 0.4% on the week
Pound (GBP)
The pound (GBP) could face volatility this week, as GBP investors digest a raft of high-impact UK data along with the Bank of England’s (BoE) latest interest rate decision. Expect to see Sterling struggle if the bank leaves rates unchanged and strikes a cautious tone.
Euro (EUR)
Germany’s latest ZEW economic sentiment index could boost the euro (EUR) this week, if it points to improving morale in the Eurozone’s largest economy.
US dollar (USD)
The Federal Reserve is widely expected to deliver an interest rate hike this week, which could support the US dollar (USD). However, with the hike priced in, the bank’s accompanying commentary may drive USD movement.
Australian dollar (AUD)
Market-moving Australian data is thin on the ground this week, likely leaving the Australian dollar (AUD) to trade on market risk dynamics. Could global oil supply fears weigh on AUD amid the escalating crisis in the Middle East?
South African rand (ZAR)
An expected deterioration in domestic consumer confidence could pressure the South African rand (ZAR) in the latter part of the week. Meanwhile, gold prices and risk appetite could drive ZAR.
Canadian dollar (CAD)
Canada’s latest consumer price index on Monday could influence the Canadian dollar (CAD), particularly if it deviates from expectations. Elsewhere, oil price movements could determine CAD’s direction, with stronger prices potentially underpinning the crude-linked ‘loonie’.
New Zealand dollar (NZD)
Midweek, New Zealand will publish its GDP growth rate for the second quarter. A sharp slowdown could weigh on the New Zealand dollar (NZD).
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