The pound was propelled higher last week in the wake of the Bank of England's (BoE) latest interest rate decision. While the BoE cut rates as expected, GBP investors were caught off guard by the surprisingly narrow vote by the Monetary Policy Committee.
Last week's key rate movements
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GBP/EUR – Up 0.6% on the week
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GBP/USD – Up 1.2% on the week
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EUR/USD – Up 0.7% on the week
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AUD/USD – Up 0.7% on the week
Pound (GBP)
The spotlight this week will be on the UK’s latest GDP release. A sharp slowdown in second-quarter growth could see the pound (GBP) slash last week's post-BoE gains.
Euro (EUR)
For the euro (EUR), attention will turn to Germany’s ZEW economic sentiment index. Signs of weakening confidence in the Eurozone's largest economy could dampen the single currency’s appeal.
US dollar (USD)
The US consumer price index will be the key data point for the US dollar (USD) this week. With inflation projected to have accelerated in July, the figures could dampen expectations for Federal Reserve rate cuts and help the 'greenback' recoup recent losses.
Australian dollar (AUD)
The Reserve Bank of Australia’s (RBA) interest rate decision is due this week. An anticipated cut could put fresh pressure on the Australian dollar (AUD).
South African rand (ZAR)
South Africa’s retail sales figures may offer some support to the rand (ZAR) if, as forecast, sales growth accelerated sharply in June.
Canadian dollar (CAD)
With no major domestic releases on the agenda, the Canadian dollar (CAD) is expected to take its cues from oil market movements this week.
New Zealand dollar (NZD)
Risk appetite could be the primary driver for the New Zealand dollar (NZD) this week, while domestic manufacturing data could also play a role. Another contraction in the sector may weigh on the 'kiwi' in the latter half of the week.
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