The US dollar experienced notable volatility last week as the US government shutdown unsettled USD investors, while also casting uncertainty over the Federal Reserve’s next policy moves through the delay of key US economic indicators.
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 0.6% on the week
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EUR/USD – Up 0.3% on the week
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AUD/USD – Up 0.9% on the week
Pound (GBP)
UK economic releases are thin on the ground this week, but GBP investors will look to a speech by Bank of England (BoE) Governor Andrew Bailey for direction at the start of the session. A hawkish tone could help to strengthen the pound (GBP).
Euro (EUR)
Germany’s latest industrial and trade data releases are likely to drive the euro (EUR) this week. If industrial activity and export growth show signs of recovery in August, it could help to underpin demand for the single currency.
US dollar (USD)
Barring a swift end to the US government shutdown and subsequent publication of last month’s US payroll report, the primary catalyst for the US dollar (USD) this week will be the publication of the minutes from the Federal Reserve’s September policy meeting. A dovish tilt could send USD exchange rates lower.
Australian dollar (AUD)
Australia’s latest consumer confidence figures could lift the Australian dollar (AUD) this week if they report a rebound in morale this month.
South African rand (ZAR)
A lull in domestic data will keep the South African rand (ZAR) sensitive to wider market trends this week. Record gold prices could help underpin the rand and offset investor caution.
Canadian dollar (CAD)
Canada’s latest jobs data will be closely watched by CAD investors this week. If the unemployment rate continued to climb in September, it's likely to bolster Bank of Canada (BoC) rate cut bets and sink the Canadian dollar (CAD) at the end of the week.
New Zealand dollar (NZD)
An expected interest rate cut from the Reserve Bank of New Zealand (RBNZ) could weigh heavily on the New Zealand dollar (NZD) this week, particularly if the bank signals it remains open to further easing measures.
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