FX weekly forecast: Strong US inflation to strengthen the US dollar?

Pound (GBP)

The UK’s latest GDP figures will be the primary focus for GBP investors this week. Expect to see the pound (GBP) falter if they report economic growth slowed in the third quarter.

Euro (EUR)

Germany’s latest ZEW economic sentiment index will act as a key catalyst for movement for the euro (EUR) this week. Will a softening of morale place more pressure on the single currency in the first half of the session?

US dollar (USD)

In addition to speculation over the potential impact of another Trump presidency, the US dollar (USD) will also be influenced by the latest US consumer price index this week. If US inflation rose as forecast in October, it may weaken Federal Reserve interest rate cut bets and lift USD exchange rates.

Australian dollar (AUD)

Australia will publish its latest jobs report later this week. If employment growth remained strong in October, it’s likely to temper Reserve Bank of Australia (RBA) rate cut speculation and lift the Australian dollar (AUD).

South African rand (ZAR)

The South African rand (ZAR) could receive a boost this week if South Africa’s latest unemployment figures report that the jobless rate fell in the third quarter.

Canadian dollar (CAD)

In the absence of any notable domestic data, movement in the commodity-linked Canadian dollar (CAD) may be tied to oil price dynamics this week. Another softening of global crude prices may weigh heavily on the ‘loonie’.

New Zealand dollar (NZD)

New Zealand economic data is also in short supply this week, likely leaving the direction of the New Zealand dollar (NZD) to be dictated by market risk sentiment this week.

Matthew Andrews

Contact Matthew Andrews


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