FX weekly forecast: Slowing inflation to weaken the US dollar?

Pound (GBP)

The only GBP data of note this week will be the UK’s latest GDP print. The monthly figures may help to underpin the pound (GBP) if they report the UK economy returned to growth in August.

Euro (EUR)

The minutes from the European Central Bank’s (ECB) latest policy meeting will be released this week. EUR investors will look to the minutes to gauge whether there is any appetite for further monetary easing, with the euro (EUR) poised to fall if they suggest an October rate cut may be on the table.

US dollar (USD)

Centre stage this week will be the publication of the latest US consumer price index. September’s CPI figures are expected to report inflation in the US continued to cool. This could revive bets for another 50bps interest rate cut from the Federal Reserve and pull the US dollar (USD) lower in the latter half of the session.

Australian dollar (AUD)

The minutes from the Reserve Bank of Australia’s (RBA) latest policy meeting may act as the main catalyst of movement for the Australian dollar (AUD) this week. The ‘Aussie’ is likely to soften if the minutes further trim bets for another rate hike.

South African rand (ZAR)

In the absence of any notable domestic data, the South African rand (ZAR) is likely to remain highly sensitive to market sentiment this week. If tensions in the Middle East continue to flare, the rand may struggle.

Canadian dollar (CAD)

The Canadian dollar (CAD) may come under pressure this week if Canada’s latest jobs data reports that unemployment remained elevated in September.

New Zealand dollar (NZD)

This week sees the Reserve Bank of New Zealand (RBNZ) deliver its latest interest rate decision. Expect to see the New Zealand dollar (NZD) falter if the RBNZ cuts rates again this month.

Matthew Andrews

Contact Matthew Andrews


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