Weekly currency forecast: USD and GBP to climb as Fed and BoE push back on rate cut bets?

Roxane Cody January 29th 2024 - 2 minute read

Last week saw the euro slide after the European Central Bank (ECB) failed to convince investors that it would not start cutting rates until the summer.

This week, we’ll see the Federal Reserve and the Bank of England (BoE) hold their first interest rate decisions of 2024. If the central banks push back on rate cut speculation then both the US dollar and the pound could firm.


The pound wavered last week, with Sterling rising against some of its weaker rivals thanks primarily to an unexpected acceleration in growth in the UK services sector this month.

This week, the pound could be subdued through the first part of the week as investors await the Bank of England interest rate decision on Thursday. If the BoE moves to quell rate cut speculation, Sterling could climb in the latter part of the session.


Last week saw the euro fluctuate lower amid poor data releases and the European Central Bank’s first policy meeting of 2024. The ECB left rates unchanged but adopted a slightly more dovish tone in its accompanying policy statement.

The common currency could face further losses this week, if the Eurozone’s latest GDP data shows that the bloc slipped into a recession in the second half of 2023. The latest consumer price index is then due out on Thursday, with any signs of cooling inflation potentially weighing on EUR.

US dollar

The US dollar wavered mostly sideways last week. While a broadly risk-on mood undermined the safe-haven currency, rising US Treasury yields and strong US GDP both lent the ‘greenback’ support.

The key event this week is the Federal Reserve’s policy announcement, where a pushback on rate cut bets could boost USD. However, the US dollar could face selling pressure towards the end of the week if an expected decline in payrolls materialises.

Australian dollar

The Australian dollar also wobbled in a narrow range during last week’s session. Cautious optimism wasn’t enough to lift the risk-sensitive ‘Aussie’ amid fears that global interest rates could remain higher for longer.

This week, an expected decline in Australian inflation could pile pressure on AUD, as it may stoke speculation around when the Reserve Bank of Australia (RBA) could start cutting rates.

Written by
Roxane Cody

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