The surprise announcement of a US-China trade truce infused fresh volatility into the FX market last week, with the latest US inflation print and UK GDP figures also acting as key catalysts for their respective currencies.
Pound (GBP)
In addition to potential gains stemming from Monday’s UK-EU summit in London, the pound (GBP) will also be influenced by the UK’s latest consumer price index this week. An acceleration of UK inflation last month could temper Bank of England (BoE) interest rate cut bets and strengthen GBP exchange rates in mid-week trade.
Euro (EUR)
The publication of the Eurozone’s latest PMIs will be centre stage for EUR investors this week. If May’s preliminary figures report private sector growth remains weak, the euro (EUR) will likely face headwinds.
US dollar (USD)
US economic data is in short supply this week, which could leave the US dollar (USD) vulnerable to fresh losses amid the growing economic risks facing the US that have undermined confidence in the ‘greenback’ recently. This includes the loss of the country’s final triple-A credit rating.
Australian dollar (AUD)
The Reserve Bank of Australia (RBA) is set to hold its latest policy meeting this week. Economists forecast the RBA will cut rates this month, but if the bank’s forward guidance remains hawkish, it could still bolster the Australian dollar (AUD).
South African rand (ZAR)
South Africa will publish its latest inflation figures this week. However, they may be overshadowed by President Cyril Ramaphosa’s meeting with his US counterpart Donald Trump. The South African rand (ZAR) may rally if Ramaphosa is able to ‘reset’ relations, following a bumpy start to Trump’s second term.
Canadian dollar (CAD)
The Canadian dollar (CAD) looks poised to slump this week as Canada’s latest consumer price index is expected to report a sharp deceleration in inflation last month, stoking Bank of Canada (BoC) rate cut bets.
New Zealand dollar (NZD)
The direction of the New Zealand dollar (NZD) is likely to be determined by the response to the New Zealand government’s 2025 budget this week. A tepid response may see the ‘kiwi’ slide.
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