Pound Tumbles as BoE Disappoints with Dovish Forward Guidance
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 Buoyed by Upbeat Data
The Euro opened this week’s session on the front foot, with the single currency able to take advantage of a pullback in the US Dollar. Reinforcing this upside in the Euro were some positive EUR data releases, with the latest Eurozone PMI releases and German business morale both beating expectations in June.
The publication of the Eurozone’s latest CPI figures will likely act as a key catalyst of movement in the Euro next week, with another rise in inflation potentially providing some lift to the single currency.
Top EUR data releases:
Jun 29 EUR German Inflation Rate (Jun)
Jun 30 EUR Inflation Rate (Jun)
Jul 2 EUR German Retail Sales (May)
USD – US Dollar Slips in Upbeat Trade
The US Dollar was placed on the defensive this week, with initial losses coming as a risk-on mood triggered a bout of profit taking by USD investors. This downside was then extended by the release of some lacklustre US data, with the latest durable goods orders and PMI releases printing below forecast.
Centre stage next week will undoubtedly be the latest US payroll figures, with the US Dollar poised to plunge if June’s release falls short of expectations once again.
Top USD data releases:
Jul 1 USD Initial Jobless Claims (26/Jun)
Jul 1 USD ISM Manufacturing PMI (Jun)
Jul 2 USD Non-farm Payrolls (Jun)
GBP – Pound Rally Cut Short by Dovish BoE
The Pound trended broadly higher through the first half of this week’s session, rallying in response to some Brexit optimism and hawkish expectations ahead of the Bank of England’s (BoE) latest policy meeting. This gave way to a sharp selloff of Sterling in the latter half of the week as BoE disappointed with some dovish forward guidance.
Coming up next week, the release of the UK’s latest GDP figures may provide some support to the Pound, if the final estimate sees growth in the first quarter revised higher again.
Top GBP data releases:
Jun 30 GBP GDP (Q1)
Jul 1 GBP Manufacturing PMI (Jun)
AUD – Strengthens amid Improving Risk Appetite
The Australian Dollar rallied this week, with a prevailing risk-on mood and robust PMI figures providing support to the high-yield currency. However these gains were tempered somewhat in the second half of the week amidst concerns over a coronavirus outbreak in Sydney.
Turning to next week’s session the primary focus for AUD investors is likely to be Australia’s latest trade figures. Will another healthy trade surplus in May help to further boost the ‘Aussie’?
Top AUD data releases:
Jun 30 AUD RBA Lowe Speech
Jun 30 AUD Business Confidence (Jun)
Jul 1 AUD Trade Balance (May)
ZAR – Rand Firms on Strong Inflation Reading
The South African Rand traded with modest gains this week, rising on the back of some impressive inflation figures, but with its gains capped by expectations that the South African Reserve Bank (SARB) is unlikely to raise interest rates any time soon.
Meanwhile, the Rand could receive another boost next week, if South Africa’s latest manufacturing PMI prints positively.
Top ZAR data releases:
Jun 30 ZAR Trade Balance (May)
Jul 1 ZAR Manufacturing PMI (Jun)
CAD –Canadian Dollar Bolstered by Robust Oil Prices
The Canadian Dollar trended steadily higher through the past week, as demand for the commodity linked currency was supported by a strong uptick in oil prices, which helped to offset data showing a sharper-than-expected contraction in domestic retail sales growth in April.
Looking ahead, the ‘Loonie’ could face some headwinds next week as Canada’s latest monthly GDP release is expected to report growth slumped in April.
Top CAD data releases:
Jun 30 CAD GDP (Apr)
Jul 2 CAD Trade Balance (May)