After briefly striking new multi-month lows, the US dollar (USD) was able to mount a recovery last week amid a modest repricing of Federal Reserve interest rate cut expectations following the US central bank’s latest rate decision.
Last week's key rate movements
-
GBP/EUR – Down 0.5% on the week
-
GBP/USD – Down 0.7% on the week
-
EUR/USD – Unchanged on the week
-
AUD/USD – Down 0.8% on the week
Pound (GBP)
The UK’s preliminary PMIs for September may drag on the pound (GBP) this week, if they show that growth in the services sector began to moderate again following a jump in August.
Euro (EUR)
The Eurozone's own PMIs will be in focus for EUR investors this week. If the recent uptick in activity through the bloc’s private sector persisted into a fourth consecutive month, it could help boost the euro (EUR).
US dollar (USD)
The Federal Reserve’s preferred indicator for inflation, the core PCE price index, will be in the spotlight this week. If August’s index points to a continued acceleration of inflation, it could temper interest rate cut expectations and lift the ‘greenback’.
Australian dollar (AUD)
The Australian dollar (AUD) may strengthen this week if another acceleration in domestic inflation prompts investors to trim their Reserve Bank of Australia (RBA) rate cut bets.
South African rand (ZAR)
South Africa’s latest consumer confidence data could offer some support to the South African rand (ZAR) in the second half of the week, if sentiment in the third quarter continued to show improvement.
Canadian dollar (CAD)
The Canadian dollar’s (CAD) performance this week is likely to be tied to Canada’s latest GDP figures. If economic growth accelerated in August, even modestly, it may help to underpin CAD exchange rates.
New Zealand dollar (NZD)
In the absence of any notable domestic data, the direction of the New Zealand dollar (NZD) this week is likely to be dictated by wider market trends. If a risk-averse mood prevails, the ‘kiwi’ is expected to drop.
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.
