Last week, the US dollar suffered its sharpest weekly decline since August. Rising tariff tensions between the US and China, signs of credit stress among US regional banks, and dovish comments from Federal Reserve Chair Jerome Powell all weighed on USD.
Last week's key rate movements
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GBP/EUR – Up 0.2% on the week
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GBP/USD – Up 0.5% on the week
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EUR/USD – Up 0.3% on the week
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AUD/USD – Down 0.4% on the week
Pound (GBP)
Among a flurry of data releases this week, the focus for the pound (GBP) will be the UK’s consumer price index for September. With inflation expected to rise to 4% – double the Bank of England’s (BoE) 2% target – Sterling could climb.
Euro (EUR)
The Eurozone’s latest PMI results could weigh on the euro (EUR) this week. Economists expect to see services activity slowing in October and manufacturing continuing to contract, potentially raising concerns about the Eurozone.
US dollar (USD)
US inflation data on Friday could see the US dollar (USD) end this week’s session on a strong note. Headline inflation is expected to accelerate from 2.9% to 3.1%, thereby dampening bets on an aggressive pace of policy easing from the Federal Reserve.
Australian dollar (AUD)
Australia’s PMI surveys could influence the Australian dollar (AUD) this week. An expected slowdown in overall domestic business activity could weigh on the ‘Aussie’.
South African rand (ZAR)
South Africa’s latest inflation data is due out this week, with forecasters expecting price pressures to have risen from 3.3% to 3.5% in September. This could support the South African rand (ZAR) by dampening South African Reserve Bank (SARB) rate cut bets.
Canadian dollar (CAD)
Canada will also publish its September CPI this week, with inflation forecast to jump from 1.9% to 2.3%. A pullback in Bank of Canada (BoC) interest rate cut bets could underpin the Canadian dollar (CAD).
New Zealand dollar (NZD)
Market-moving New Zealand data is absent from the economic calendar this week. As a result, the New Zealand dollar (NZD) may track any shifts in risk appetite.
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