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Pound Maintains Bullish Run on BoE Rate Hike Speculation, US Dollar Rocked by Fluctuating Risk Sentiment

Pound Maintains Bullish Run on BoE Rate Hike Speculation, US Dollar Rocked by Fluctuating Risk Sentiment

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 Undermined by Dovish ECB Commentary

The Euro struggled to attract support during this week’s session as European Central Bank (ECB) officials continued to play down concerns over rising inflation in the Eurozone. The single currency then faced additional pressure through the latter half of the week after the latest Eurozone PMIs printed below expectations.

Turning to next week’s session, whilst another dovish policy statement from the ECB could weigh on the Euro, this could a offset if preliminary GDP figures report a solid acceleration of Eurozone economic growth in the third quarter.

Top EUR data releases:

Oct 25 EUR German IFO Business Climate (Oct)

Oct 28 EUR ECB Rate Decision

Oct 29 EUR GDP (Q3)


USD – US Dollar Fluctuates amidst Mixed Risk Appetite

The US Dollar spent much of the first half of this week on the defensive, as a prevailing risk-on mood sapped demand for the safe-haven currency. But the ‘Greenback’ then began to rebound in the latter half of the session, as concerns that Chinese construction giant Evergrande may fail to meet its next debt deadline, soured market sentiment

The publication of the latest US GDP figures will no doubt be the primary focus for USD investors next week. Will a slowing of growth spook investors, and boost demand for the US Dollar?

Top USD data releases:

Oct 27 USD Durable Goods Orders (Sep)

Oct 28 USD GDP (Q3)

Oct 29 USD PCE Price Index (Sep)


GBP – Pound Firms on BoE Rate Hike Bets

The Pound continued to be underpinned by expectations of an imminent rate hike from the Bank of England (BoE) this week, particularly in the wake of some hawkish comments from BoE Governor Andrew Bailey. Whilst these expectations were later knocked by the release of a weaker-than-expected inflation reading, Sterling was largely able to maintain its gains throughout the session, aside from some pressure at the end of the session on the back of some weak UK retail sales figures.

Rishi Sunak will be in the spotlight as he publishes his Autumn Budget next week. Will a leaner spending plan from the Chancellor exert some pressure on the Pound?

Top GBP data releases:

Oct 26 GBP CBI Distributive Trades (Oct)

Oct 27 GBP Autumn Budget


AUD – Australian Dollar Finds Fleeting Gains

After an initial dip in response to weak Chinese GDP data, the Australian Dollar was able to appreciate through the first half of this week as it was buoyed by an upbeat market mood and some optimism from the Reserve Bank of Australia (RBA). However the ‘Aussie’ was unable to sustain its best levels for long, with the currency faltering in the latter half of the week as market sentiment deteriorated.

Coming up next week, the release of Australia’s consumer price index will likely act as the main catalyst of movement for the ‘Aussie’, with another strong inflation reading in the third quarter potentially extending some support to the currency.

Top AUD data releases:

Oct 27 AUD Inflation Rate (Q3)

Oct 29 AUD Retail Sales (Sep)


ZAR – Rand Boosted by Strong Inflation Reading

The South African Rand trended broadly higher this week, as a strong domestic inflation reading reinforced expectations the South African Reserve Bank (SARB) might raise interest rates next month. However the Rand’s gains were trimmed in the second half of the week as a souring market mood dented demand for the emerging market currency.

The publication of South Africa’s latest trade figures could offer fresh direction to the Rand next week, with another bumper trade balance potentially lending some support to ZAR exchange rates.

Top ZAR data releases:

Oct 29 ZAR Trade Balance (Sep)


CAD – Canadian Dollar Struggles as Oil Prices Fluctuate

The Canadian Dollar traded without any strong directional bias week, as fluctuating oil prices robbed the ‘Loonie’ of a key pillar of support, whilst a stronger-than-expected inflation reading only lent some fleeting support to CAD exchange rates.

The Bank of Canada’s (BoC) latest interest rate decision will be centre stage next week, potentially infusing some volatility into the Canadian Dollar. depending on the bank’s forward guidance.

Top CAD data releases:

Oct 27 CAD BoC Interest Rate Decision

Oct 29 CAD GDP (Aug)

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