Pound (GBP)
The Pound (GBP) could see notable volatility amid a flurry of high-impact data this week. The key focus will likely be UK inflation data, with a forecast warming of both headline and core inflation likely to strengthen the Pound amid fading Bank of England (BoE) interest rate cut expectations. However, signs that wage growth is cooling could limit Sterling’s upside.
US Dollar (USD)
Despite an increasingly hawkish consensus from Federal Reserve policymakers in recent days, a forecast cooling of both headline and core inflation will likely undermine the US Dollar (USD) on Tuesday, serving to reinforce market speculation that the Fed’s policy loosening cycle is around the corner.
Euro (EUR)
The publication of Germany’s latest ZEW economic sentiment index will likely be the key catalyst of Euro (EUR) movement later this week. Should the data print as expected, EUR exchange rates are likely to strengthen amid signs of revived optimism in the Eurozone’s largest economy.
Australian Dollar (AUD)
The Australian Dollar (AUD) may falter following the latest Australian jobs data this week. With economists expecting unemployment to have edged higher in January, concerns of weakness in the Australian labour market could apply pressure to the Reserve Bank of Australia (RBA) to start considering rate cuts.
New Zealand Dollar (NZD)
A speech from Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr may drive ‘Kiwi’ movement later in the week. Should Orr continue to advocate for restrictive monetary policy, NZD may garner some investor interest.
South African Rand (ZAR)
The highly risk-sensitive South African Rand (ZAR) may be vulnerable to any shifts in trading conditions this week amid a lack of notable data releases. If cooling US inflation does boost Fed rate cut bets, ZAR could gain ground.
Canadian Dollar (CAD)
A data-light week for the Canadian Dollar (CAD) may see the commodity-linked currency driven primarily by oil price fluctuations. Could rising oil prices lift the ‘Loonie’?