The euro faced notable headwinds last week as France looked to be on the precipice of a new political crisis following the shock resignation and subsequent reappointment of Prime Minister Sébastien Lecornu.
Last week's key rate movements
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GBP/EUR – Up 0.2% on the week
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GBP/USD – Down 0.9% on the week
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EUR/USD – Down 1% on the week
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AUD/USD – Down 1.9% on the week
Pound (GBP)
The UK’s latest jobs report will be in the spotlight for GBP investors this week. Expect the pound (GBP) to weaken if August’s data points to a further cooling of the UK labour market.
Euro (EUR)
Germany’s latest ZEW economic sentiment index will act as the primary catalyst for the euro (EUR) this week. If morale continued to improve this month, it may help the single currency claw back some of last week’s losses.
US dollar (USD)
US President Donald Trump’s latest tariff threat against China will be a key focus for USD investors this week. While many investors remain confident in the so-called ‘TACO’ trade, the threat of renewed US-China trade tensions is poised to infuse fresh volatility into the US dollar (USD).
Australian dollar (AUD)
The publication of the minutes from the Reserve Bank of Australia’s (RBA) latest policy meeting could boost the Australian dollar (AUD) this week if a hawkish consensus helps to temper RBA rate cut bets. However, any gains could be tested by another underwhelming jobs report.
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 risk sentiment and commodity prices this week. While renewed tariff uncertainty poses a risk to the emerging currency, the continued rally in gold prices may offer support.
Canadian dollar (CAD)
Market-moving Canadian data is in short supply this week, leaving the Canadian dollar (CAD) vulnerable if oil prices slide to new multi-month lows.
New Zealand dollar (NZD)
The New Zealand dollar (NZD) will be driven by wider market trends this week amid a lull in NZD economic releases. A cautious mood is likely to pull the ‘kiwi’ lower.
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