FX weekly forecast: ECB rate cut to weaken the euro?

Pound (GBP)

The pound (GBP) may be infused with volatility this week with the publication of the UK’s latest inflation and employment figures. The former will be of particular note, as a cooling of inflation may stoke Bank of England (BoE) interest rate cut bets.

Euro (EUR)

In the spotlight this week is undoubtedly the European Central Bank’s (ECB) latest interest rate decision. Most investors see the bank cutting rates again this month, which is likely to pull the euro (EUR) lower.

US dollar (USD)

The latest US retail sales figures may offer support to the US dollar (USD) later this week, if they report an acceleration in sales growth last month. In the meantime, a cautious mood may help underpin the ‘greenback’ through the first half of the session.

Australian dollar (AUD)

The Australian dollar (AUD) may come under pressure later this week as Australia’s latest jobs report is expected to highlight a slowdown in employment growth last month.

South African rand (ZAR)

As domestic data is in short supply, the South African rand (ZAR) is likely to remain sensitive to market sentiment this week. If a cautious mood prevails, the rand is likely to struggle.

Canadian dollar (CAD)

Canada’s latest consumer price index could help underpin the Canadian dollar (CAD) this week as an expected acceleration of inflation could weaken bets for another Bank of Canada (BoC) rate cut in the near future.

New Zealand dollar (NZD)

The New Zealand dollar (NZD) is likely to stumble in the first half of this week. New Zealand’s own CPI figures are forecast to show inflation cooled sharply in the third quarter, which may boost the case for further rate cuts from the Reserve Bank of New Zealand (RBNZ).

Matthew Andrews

Contact Matthew Andrews


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