Pound (GBP)
The Pound (GBP) could see significant movement this week on the back of some high-impact UK economic releases. An expected cooling of UK inflation and wage growth may weigh heavily on Sterling in the first half of the week, as these will likely stoke expectations for a Bank of England (BoE) interest rate cut. Further losses may follow at the end of the session if a contraction in UK retail sales reinforces recession fears.
Euro (EUR)
A contraction in German GDP in 2023 may lead the Euro (EUR) to struggle at the start of this week. Although any losses may prove short-lived, with the single currency potentially strengthening if subsequent data shows that German economic sentiment continued to improve this month.
US Dollar (USD)
Federal Reserve rate cuts bets may continue to act as a headwind for the US Dollar (USD) this week. However, escalating tensions in the Middle East as well as a forecast expansion in US retail sales could still help to propel the ‘Greenback’ higher.
Australian Dollar (AUD)
Australia will publish its latest jobs report later this week. Analysts forecast the unemployment rate will have held steady at 3.9% in December. But could another solid expansion in employment growth help to lift the Australian Dollar (AUD)?
South African Rand (ZAR)
Movement in the South African Rand (ZAR) is likely to be tied to market risk appetite this week as domestic data remains in short supply. Will heightened geopolitical tensions lead skittish investors to shun the emerging market currency?
Canadian Dollar (CAD)
An expected acceleration in domestic inflation in December could weaken Bank of Canada (BoC) rate cut expectations and lift the Canadian Dollar (CAD) this week. Further gains could be seen if oil prices appreciate amid the rise in tensions in the Middle East.
New Zealand Dollar (NZD)
The New Zealand Dollar (NZD) is likely to remain sensitive to market risk sentiment this week. A bearish mood may see the ‘Kiwi’ struggle to attract support.