Euro Buoyed by Upbeat Data, US Dollar Retreats as US Employment Figures Miss

Find out how the major currencies have been performing and what movement we could see in the days ahead with our weekly exchange rate update.

 

EUR – Euro Bolstered by Positive Data Releases

The Euro trended broadly higher this week, as the appeal of the single currency was bolstered by some positive Eurozone data releases. These included a stronger-than-expected inflation reading in August as well the bloc’s latest jobs report, which revealed unemployment fell to a 14-month low in July.

Centre stage next week will be the European Central Bank’s (ECB) latest policy meeting. No policy changes are expected from the ECB this month, but the Euro could still be sent higher if the bank signals that discussions about reducing the bank’s bond purchases have begun.

Top EUR data releases:

Sep 6 EUR German Factory Orders (Jul)

Sep 7 EUR German ZEW Economic Sentiment Index (Sep)

Sep 9 EUR ECB Interest Rate Decision

 

USD – US Dollar Fumbles on Disappointing Jobs Data

The US Dollar spent the first half of this week on the back foot, as the currency continued to be undermined by Federal Reserve Chair Jerome Powell’s tapering comments the previous session, as well as by a disappointing ADP employment report. This downside in the ‘Greenback’ was then extended through the second half of the week after the latest US payroll reading came in well below expectations.

Turning to next week’s session, the publication of July’s job opening figures could provide the US Dollar with a boost if they continue to point to slack in the US labour market.

Top USD data releases:

Sep 8 USD JOLTs Job Openings (Jul)

Sep 9 USD Initial Jobless Claims (4/Sep)

 

GBP – Pound Subdued amidst UK Economic Uncertainty

The Pound struggled to attract support this week, as uncertainty over the UK’s economic recovery continued to sap Sterling sentiment. This came amidst ongoing concerns over domestic labour shortages and supply chains issues as well as elevated coronavirus cases, all of which could undermine economic activity in the coming months.

Looking ahead to next week’s session, the focus for GBP investors is likely to be on the UK’s latest GDP release, with the Pound likely to face some headwinds if growth in the three months to July is shown to have slowed.

Top GBP data releases:

Sep 10 GBP GDP (Jul)

Sep 10 GBP Industrial Production (Jul)

Sep 10 GBP Trade Balance (Jul)

 

 

AUD – Australian Dollar Bolstered by Upbeat GDP Release

After a slow start to the week, the Australian Dollar was able to make some convincing gains in mid-week trade after domestic GDP figures printed above expectations. Reinforcing this upside in the ‘Aussie’ was Australia’s latest trade balance, which revealed the country’s trade surplus struck a record high in July.

The Reserve Bank of Australia’s (RBA) latest interest rate decision will no doubt be the primary focus for AUD investors next week, and could see the ‘Aussie’ strengthen if the bank strikes a hawkish tone in its forward guidance.

Top AUD data releases:

Sep 7 AUD RBA Interest Rate Decision

Sep 8 AUD Business Confidence (Aug)

 

ZAR – South African Rand Firms in Risk-On Trade

The South African Rand steadily appreciated this week, with the emerging market currency benefiting from a prevailing risk-on mood. Contributing to the Rand’s strength was South Africa’s latest manufacturing PMI, which unexpectedly revealed the factory sector returned to growth last month.

The Rand could face some considerable headwinds during next week’s session however, as South Africa’s latest GDP release is expected to report economic growth began to contract again in the second quarter.

Top ZAR data releases:

Sep 7 ZAR Consumer Confidence (Q3)

Sep 7 ZAR GDP (Q2)

 

CAD – Canadian Dollar Rocked by Shock Contraction in GDP

The Canadian Dollar was knocked this week, as a shock contraction of domestic growth in the second quarter weighed heavily on the currency in mid-week trade. This more than offset a modest rise in oil prices this week, which may have otherwise lent some support to the ‘Loonie’.

Turning to next week’s session, the focus for CAD investors will be on the Bank of Canada’s (BoC) latest policy meeting. Will the recent GDP shock prompt a more cautious outlook from the central bank and weaken the Canadian Dollar as a result?

Top CAD data releases:

Sep 8 CAD Ivey PMI (Aug)

Sep 8 CAD BoE Interest Rate Decision

Sep 10 CAD Unemployment Rate (Aug)