UK Chancellor Rachel Reeves is set to deliver her Spring Statement this week. Faced by weak domestic growth and rising borrowing costs, the Chancellor is expected to outline major spending cuts, which could undermine the pound (GBP) if they are seen to weaken future growth prospects.
Pound (GBP)
There are several UK economic releases of note this week, including last month’s inflation figures. However, this might be overshadowed by the unveiling of UK Chancellor Rachel Reeves’s Spring Statement, which is expected to outline significant spending cuts and may drag on the pound later in the week.
Euro (EUR)
The first half of this week will see the publication of Germany’s latest Ifo business climate index. Analysts predict Germany’s ambitious defence and infrastructure spending plans will have driven a sharp improvement in business morale this month, which could help propel the euro (EUR) higher.
US dollar (USD)
This week, the focus for USD investors is likely to be on the latest core PCE price index. If the Federal Reserve’s preferred indicator for inflation reports price growth accelerated last month, it may bolster demand for the US dollar (USD).
Australian dollar (AUD)
Australia’s latest CPI indicator is likely to act as the main catalyst for movement in the Australian dollar (AUD) this week. If inflation accelerated as expected last month, it’s likely to temper Reserve Bank of Australia (RBA) interest rate cut expectations and boost the ‘Aussie’.
South African rand (ZAR)
In the absence of any notable domestic data, movement in the South African rand (ZAR) may be tied to market risk dynamics this week. If risk sentiment continues to be pressured by US trade policy uncertainty, this could drag on ZAR.
Canadian dollar (CAD)
The Canadian dollar (CAD) may come under pressure this week. In addition to the political uncertainty surrounding the start of Canada’s general election, domestic GDP figures are expected to report the Canadian economy shrank in February.
New Zealand dollar (NZD)
Notable NZD data is in short supply this week, likely leaving movement in the New Zealand dollar (NZD) to be driven by wider market trends.
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