Pound (GBP)
The UK data calendar is packed this week. The main catalyst of movement in the Pound (GBP) will undoubtedly be the forward guidance following the Bank of England’s (BoE) latest policy meeting, with Sterling potentially strengthening if the BoE strikes a hawkish chord. Elsewhere, the UK’s latest jobs report and GDP figures could act as a drag on GBP exchange rates in the first half of the week.
Euro (EUR)
The Euro (EUR) could face significant pressure this week as the European Central Bank (ECB) delivers its latest interest rate decision. While no changes to monetary policy are expected this month, it’s thought the ECB is now firmly exploring the idea of multiple rate cuts in 2024. If this is confirmed by the bank, EUR exchange rates are likely to plummet.
US Dollar (USD)
The latest US consumer price index will be in focus for USD investors at the start of this week. Signs of sticky inflation could strengthen the US Dollar (USD) ahead of the Federal Reserve’s final policy meeting of the year. The Fed is expected to leave interest rates on hold this month but could trigger significant volatility as it outlines its policy plans for 2024. If the bank pushes back against speculation it will begin cutting interest rates as early as March, the ‘Greenback’ is likely to surge.
Australian Dollar (AUD)
Trade in the Australian Dollar (AUD) may be mixed this week. Data released at the start of the session is expected to report an improvement in domestic consumer and business confidence, which could help shield AUD from any risk-off flows. However, the ‘Aussie’ could face headwinds at the end of the week as Australia’s latest jobs data is forecast to report a rise in domestic unemployment.
South African Rand (ZAR)
Movement in the South African Rand (ZAR) is likely to remain tied to market risk appetite this week. This could infuse the emerging market currency with significant volatility as the Fed, BoE and ECB deliver their latest interest rate decisions.
Canadian Dollar (CAD)
CAD data is thin on the ground this week, likely leaving oil price dynamics to act as the driving force behind the Canadian Dollar (CAD). If prices continue to rebound from their recent lows this could help to underpin the ‘Loonie’.
New Zealand Dollar (NZD)
New Zealand’s latest GDP figures are expected to report a sharp slowdown in economic activity in the third quarter. Coupled with a sense of caution ahead of several major central bank interest rate decisions, this could leave the New Zealand Dollar (NZD) on the back foot through the week.