Central bank interest rate decisions and high-impact GDP releases are keenly awaited this week. However, they may take a back seat to developments in the Middle East, where a pause in hostilities may precede a fresh US-Iran ceasefire.
Last week's key rate movements
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GBP/EUR – Down 0.4% on the week
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GBP/USD – Down 1% on the week
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EUR/USD – Down 0.5% on the week
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AUD/USD – Unchanged on the week
Pound (GBP)
The Bank of England (BoE) will hold its latest policy meeting this week. As the BoE is widely forecast to leave interest rates on hold, the focus will be on the bank's forward guidance, with the pound (GBP) potentially slipping if policymakers remain cautious regarding potential rate hikes.
Euro (EUR)
The spotlight for EUR investors this week will be on the Eurozone’s GDP figures for the second quarter. Analysts expect growth to have rebounded in the second quarter, potentially providing some lift for the euro (EUR).
US dollar (USD)
The US dollar (USD) may garner support this week from a robust second-quarter GDP print and hawkish signals from the Federal Reserve following its latest policy meeting. However, USD's upside potentially could equally be tested by a potential US-Iran ceasefire.
Australian dollar (AUD)
Australia’s latest quarterly inflation print may set expectations for upcoming Reserve Bank of Australia (RBA) interest rate decisions. Could an acceleration of inflation in the second quarter stoke rate hike bets and lift the Australian dollar (AUD)?
South African rand (ZAR)
The South African rand (ZAR) looks positioned to strengthen this week if a ceasefire in the Middle East helps to bolster risk appetite and bring down oil prices.
Canadian dollar (CAD)
The publication of Canada's latest monthly GDP print will be a key focus for CAD investors this week, with an acceleration of growth in June likely to reflect positively on the Canadian dollar (CAD).
New Zealand dollar (NZD)
In the absence of any notable domestic data, movement in the New Zealand dollar (NZD) will be tied to market risk dynamics this week, with Middle East peace optimism potentially helping to underpin demand for the 'kiwi'.
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