UK fiscal jitters placed considerable pressure on the pound last week, plunging GBP/EUR and GBP/USD to new multi-month lows. These losses could be extended this week if there is a dovish tilt to the Bank of England’s (BoE) latest interest rate decision.
Last week’s key rate movements
-
GBP/EUR – Down 0.5% on the week
-
GBP/USD – Down 1.2% on the week
-
EUR/USD – Down 0.8% on the week
-
AUD/USD – Up 0.5% on the week
Pound (GBP)
The Bank of England will deliver its latest interest rate decision later this week. Market consensus is for the bank to leave rates on hold, but the pound (GBP) may extend its recent losses if the bank leaves the door open for another rate cut before the end of 2025.
Euro (EUR)
Germany’s latest factory orders and industrial production figures may act as the primary catalyst for the euro (EUR) this week. Further signs of weakness in the country’s vital manufacturing sector could be cause for concern for EUR investors.
US dollar (USD)
Mid-tier US jobs data are likely to have an outsized impact on the US dollar (USD) this week, as the US government shutdown continues to block the release of the more influential non-farm payrolls report. If October’s report points to further slack in the US labour market, USD exchange rates are likely to weaken.
Australian dollar (AUD)
The Reserve Bank of Australia’s (RBA) latest interest rate decision will be in the spotlight for AUD investors at the start of this week, with the Australian dollar (AUD) likely to appreciate if the bank keeps rates on hold and continues to strike a hawkish note.
South African rand (ZAR)
Movement in the South African rand (ZAR) is likely to be tied to market sentiment this week amid the absence of any notable domestic data. Any risk aversion could see the rand come under pressure.
Canadian dollar (CAD)
The Canadian dollar (CAD) may come under pressure later this week as Canada’s latest jobs figures are expected to report unemployment ticked higher in October.
New Zealand dollar (NZD)
New Zealand’s latest jobs data could drag on the New Zealand dollar (NZD) this week, assuming it reports unemployment rose again in the third quarter.
Never miss a movement. Create a free account with Currencies Direct to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.
