FX weekly forecast: Trump’s attacks on the Federal Reserve to undermine the US dollar?

The mounting confidence crisis in the US dollar could continue into this week’s session as Donald Trump ramps up his criticism of Federal Reserve Chair Jerome Powell, stoking fears for the Fed’s independence.

Pound (GBP)

The release of the UK’s latest PMIs will be the primary focus for GBP investors this week. If April’s preliminary figures report growth in the vital services sector remains resilient, the pound (GBP) is likely to strengthen. 

Euro (EUR)

This week will also see the release of the Eurozone’s own PMI figures. EUR investors will be seeking to gauge how Trump’s tariffs may have impacted the bloc’s private sector in April, with the euro (EUR) likely to stumble if they report growth has softened.

US dollar (USD)

Limited US data of note is likely to see USD exchange rates remain highly sensitive to US policy sentiment this week. Expect the US dollar (USD) to remain volatile, especially if US President Donald Trump continues to sow confusion or threaten the independence of the Federal Reserve.

Australian dollar (AUD)

Australia’s latest PMIs may act as a headwind for the Australian dollar (AUD) this week as economists forecast growth in the private sector will have contracted this month.

South African rand (ZAR)

An acceleration in domestic inflation may infuse some volatility into the South African rand (ZAR) this week, as might any news regarding the future of the coalition government amid an ongoing standoff over this year’s budget.

Canadian dollar (CAD)

The commodity-linked Canadian dollar (CAD) may strengthen this week if oil prices continue to rally. However, the currency’s upside potential may be tested if Canada’s latest retail sales data disappoints.

New Zealand dollar (NZD)

With New Zealand data absent for the remainder of this week’s session, risk appetite could drive the New Zealand dollar (NZD). If sentiment continues to fluctuate, NZD could face volatility.

---

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.