Following on from Andy Burnham’s convincing by-election victory last week, Prime Minister Keir Starmer has announced his resignation, with the resulting political jitters potentially applying some risk premium to the pound this week.
Last week's key rate movements
-
GBP/EUR – Down 0.5% on the week
-
GBP/USD – Down 1.3% on the week
-
EUR/USD – Down 0.8% on the week
-
AUD/USD – Down 0.4% on the week
Pound (GBP)
UK political developments will no doubt act as the primary catalyst for the pound (GBP) this week, with Prime Minister Keir Starmer’s resignation timetable potentially triggering fresh volatility in the UK bond market.
Euro (EUR)
For EUR investors, the Eurozone’s latest preliminary PMIs will be in focus this week. If these report activity in the bloc’s private sector continues to contract this month, the euro is likely to slide.
US dollar (USD)
The release of the latest core PCE price index – the Federal Reserve’s preferred measure of inflation – could underpin demand for the US dollar (USD) this week if an expected rise in May’s index reinforces bets for an accelerated timeline for rate hikes.
Australian dollar (AUD)
Australia will publish its latest consumer price index this week. Analysts predict May’s index will report another acceleration in headline inflation. Will this be enough to revive bets for further Reserve Bank of Australia (RBA) rate hikes and help underpin the Australian dollar (AUD)?
South African rand (ZAR)
The South African rand (ZAR) may struggle for direction this week amid a lull in domestic economic indicators and ongoing caution from investors.
Canadian dollar (CAD)
Falling oil prices will likely continue to act as a headwind for the Canadian dollar (CAD) this week, but any losses could be tempered if a strong domestic inflation print at the start of the session stokes Bank of Canada (BoC) rate hike speculation.
New Zealand dollar (NZD)
In the absence of any notable domestic data, movement in the New Zealand dollar (NZD) will likely be tied to market risk dynamics this week.
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.
