The pound was unsurprisingly volatile last week with the publication of the UK’s long-awaited autumn budget, with initial jitters giving way to a rally amid a broadly positive market response to Chancellor Rachel Reeves’s restrained tax and spending plans.
Last week’s key rate movements
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GBP/EUR – Up 0.4% on the week
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GBP/USD – Up 1% on the week
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EUR/USD – Up 0.7% on the week
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AUD/USD – Up 1.4% on the week
Pound (GBP)
Notable UK economic data is in short supply this week, potentially leaving the pound (GBP) to be influenced by wider market trends and the continued political and fiscal fallout from last week’s budget.
Euro (EUR)
The Eurozone’s consumer price index will be in the spotlight for EUR investors this week. Expect the euro (EUR) to strengthen if resilient inflation figures help to underpin bets that the European Central Bank’s (ECB) cutting cycle is over.
US dollar (USD)
The latest ISM PMIs are likely to be the primary focus for USD investors this week, with an expected slowdown in manufacturing and service sector growth in November potentially pulling the US dollar (USD) lower.
Australian dollar (AUD)
Australia’s latest GDP figures are likely to act as the primary catalyst for movement for the Australian dollar (AUD) this week, with the ‘Aussie’ poised to strengthen if robust growth stokes bets that the Reserve Bank of Australia’s (RBA) next move may be an interest rate hike.
South African rand (ZAR)
South Africa will also publish its latest GDP figures this week. Economists predict domestic growth will have accelerated in the third quarter, potentially providing some lift for the South African rand (ZAR) in the first half of the session.
Canadian dollar (CAD)
Canada’s latest jobs figures could act as a headwind for the Canadian dollar (CAD) this week as November’s data is forecast to report unemployment climbed back to 7% amid the ongoing pressures facing the Canadian economy.
New Zealand dollar (NZD)
In the absence of any domestic data of note, movement in the New Zealand dollar (NZD) this week is likely to be tied to market risk dynamics, with the ‘kiwi’ potentially strengthening if positive risk sentiment prevails.
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