Movement in the currency market was erratic last week, as heightened geopolitical uncertainty ensured a volatile start to 2026.
Last week’s key rate movements
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GBP/EUR – Up 0.4% on the week
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GBP/USD – Down 0.4% on the week
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EUR/USD – Down 0.8% on the week
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AUD/USD – Unchanged on the week
Pound (GBP)
The UK will publish its latest GDP figures this week. Economists forecast uncertainty in the lead-up to the autumn budget will have kept growth suppressed in November, with a flat GDP print likely to drag on the pound (GBP).
Euro (EUR)
The focus for EUR investors this week may be a meeting between the US and Denmark to discuss the future of Greenland. If the meeting fails to ease fears of US military intervention, concerns over European security could weigh on the euro (EUR).
US dollar (USD)
The release of the latest US inflation figures threatens to be overshadowed this week, amid news the Department of Justice has launched an investigation into Federal Reserve Chair Jerome Powell. Investors fear the investigation is politically motivated, with concerns about the Fed's independence and credibility set to weigh on the US dollar (USD) this week.
Australian dollar (AUD)
Australia’s latest consumer confidence figures will be the primary catalyst of movement for the Australian dollar (AUD) at the start of this week, with the ‘Aussie’ poised to strengthen if sentiment began to improve again this month.
South African rand (ZAR)
In the absence of any notable domestic data, movement in the South African rand (ZAR) is likely to be linked to market risk dynamics this week. A cautious mood could prompt investors to steer clear of the emerging-market currency.
Canadian dollar (CAD)
Canadian economic releases are in short supply this week. However, the commodity-linked Canadian dollar (CAD) could still attract demand if oil prices continue to appreciate.
New Zealand dollar (NZD)
Movement in the New Zealand dollar (NZD) is likely to be influenced by wider market trends this week amid a lull in domestic data.
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