FX volatility remained pronounced last week, amid threats of a US military strike on Iran, mixed economic indicators, and a Supreme Court ruling against US President Donald Trump’s tariff regime, all of which contributed to market unpredictability.
Last week’s key rate movements
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GBP/EUR – Down 0.2% on the week
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GBP/USD – Up 0.3% on the week
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EUR/USD – Up 0.4% on the week
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AUD/USD – Up 0.8% on the week
Pound (GBP)
The result of the Gorton and Denton by-election will likely act as a key catalyst of movement for the pound (GBP) this week, as a sizable loss for the Labour Party is likely to reignite questions over the future of Prime Minister Keir Starmer.
Euro (EUR)
Looking ahead, Germany’s preliminary inflation reading for February will be a key focus for EUR investors this week, with the euro (EUR) potentially firming if price pressures in the Eurozone’s largest economy continue to mount.
US dollar (USD)
US tariff uncertainty poses a potential risk to the US dollar (USD) this week, with the Supreme Court striking down the previous IEEPA regime and President Donald Trump retaliating with a global 15% tariff, markets are likely to remain wary of the ‘greenback’.
Australian dollar (AUD)
Australia will publish its latest monthly CPI indicator this week. If inflation remains elevated, it's likely to strengthen bets for further interest rate hikes from the Reserve Bank of Australia (RBA) and lift the Australian dollar (AUD).
South African rand (ZAR)
ZAR investors will look to Finance Minister Enoch Godongwana's upcoming budget speech for direction this week. If the budget shows further progress in reducing the deficit and improving growth, the South African rand (ZAR) is likely to strengthen.
Canadian dollar (CAD)
The main catalyst of movement for the Canadian dollar (CAD) this week is likely to be Canada’s latest GDP figures. Some economists forecast a modest contraction in growth in the last quarter of 2025, which is likely to weigh on CAD.
New Zealand dollar (NZD)
Notable NZD data is in short supply this week, which may lead to movement in the New Zealand dollar (NZD) being tied to market risk dynamics, with fresh US trade policy uncertainty potentially infusing volatility into the ‘kiwi’.
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