The US dollar looks set to extend its recent bullish run this week if September's payrolls report further strengthens bets for a Federal Reserve interest rate hike in October.
Last week's key rate movements
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GBP/EUR – Down 0.3% on the week
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GBP/USD – Down 1.1% on the week
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EUR/USD – Down 0.8% on the week
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AUD/USD – Down 1.4% on the week
Pound (GBP)
The most notable UK economic release this week will be the UK’s second-quarter GDP print. However, barring a revision to the finalised growth figures, its impact on the pound (GBP) may be limited, instead leaving Sterling to be driven by wider currency trends.
Euro (EUR)
The main catalyst of movement for the euro (EUR) this week will be the publication of the latest Eurozone consumer price index. If September's preliminary figures report another acceleration in inflation, it may strengthen the euro as it bolsters expectations for another interest rate hike from the European Central Bank (ECB) next month.
US dollar (USD)
The latest US payroll figures will be in the spotlight this week. Another strong expansion in the US jobs market last month could cement expectations that the Federal Reserve will deliver another rate hike in October and catapult the US dollar (USD) higher at the end of the session.
Australian dollar (AUD)
The Reserve Bank of Australia’s (RBA) latest interest rate decision will be the focus for AUD investors this week. While another 25bps rate hike is almost fully priced in, the Australian dollar (AUD) has the potential to accelerate if the bank's guidance remains hawkish.
South African rand (ZAR)
In the absence of any notable domestic data, movement in the South African rand (ZAR) is likely to be tied to market risk dynamics this week, potentially exposing the rand to losses if surging oil prices continue to weigh on sentiment.
Canadian dollar (CAD)
Canada will publish its latest GDP figures this week, with August's preliminary figures potentially offering support to the Canadian dollar (CAD) if growth rebounded as forecast.
New Zealand dollar (NZD)
While market caution may limit demand for the New Zealand dollar (NZD) this week, any losses may be cushioned if domestic business confidence is shown to have improved in September.
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