US Dollar Nosedives Following US Inflation Miss, Pound Remains Highly Volatile

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 Firms on Upbeat Data

The Euro trended higher through the first half of this week, supported by an upbeat German industrial production release and Eurozone retail sales figures. The single currency was then able to maintain its positive trajectory through the latter half of the session thanks to its negative correlation with the US Dollar.

Germany’s ZEW economic sentiment index may drive movement in the Euro next week. Will another slump in morale this month weigh on EUR exchange rates?

Top EUR data releases:

Nov 15 EUR GDP (Q3)

Nov 15 EUR German ZEW Economic Sentiment (Nov)

Nov 17 EUR Inflation Rate (Oct)

 

USD – US Dollar Plummets on Underwhelming US Inflation Release

The US Dollar initially stumbled this week as easing Federal Reserve interest rate hike bets took their toll on the ‘Greenback’. The ‘Greenback’s attempts to rebound in the second half of the week were then countered by the release of the latest US consumer price index, after October’s figures reported a much larger-than-expected drop in domestic inflation and sent USD exchange rates plunging.

The most high-impact USD data next week is likely to be the latest US retail sales figures, with a strong rebound in sales growth potentially lifting the US Dollar.

Top USD data releases:

Nov 15 USD PPI (Oct)

Nov 16 USD Retail Sales (Oct)

Nov 17 USD Initial Jobless Claims (12/Nov)

 

GBP – Pound Continues to Fluctuate Wildly

Trade in the Pound was mixed over the past week. Sterling initially firmed as investors sought to snap up a bargain following its plunge the previous week, before quickly plummeting again amid a souring mood and gloomy UK economic news. Brexit optimism then allowed GBP exchange rates to bounce back again, before this recovery was capped as the UK’s latest GDP figures confirmed domestic growth contracted in the third quarter.

The spotlight for GBP investors next week will be on the UK’s long-awaited Autumn Statement. If markets respond positively to the government’s tax and spending plans the Pound could rally.

Top GBP data releases:

Nov 15 GBP Unemployment Rate (Sep)

Nov 16 GBP Inflation Rate (Oct)

Nov 17 GBP UK Autumn Statement

 

AUD – Australian Dollar Jumps amid Upbeat Mood

The Australian Dollar struggled to attract much support through the first half of this week, the appeal of the risk-sensitive ‘Aussie’ being undermined by a cautious market mood. However, the ‘Aussie’ was then able to bounce back after the weaker-than-expected US inflation figures triggered a broad-based market rally.

The publication of Australia’s latest jobs report is likely to be a key focus for AUD investors next week, where another underwhelming reading could push the ‘Aussie’ lower.

Top AUD data releases:

Nov 15 AUD RBA Meeting Minutes

Nov 16 AUD Wage Price Index (Q3)

Nov 17 AUD Unemployment Rate (Oct)

 

ZAR – Rand Buoyed by World Bank Energy Support

After some initial weakness driven by a risk-off mood, the South African Rand was able to firm this week. News that the World Bank had approved a loan to aid South Africa’s energy transition was cheered by ZAR investors who hope it could help alleviate the country’s frequent blackouts.

Looking ahead, South Africa’s latest retail sales figures will be in the spotlight for ZAR investors next week. If sales growth contracts for a fifth consecutive month the Rand is likely to fall.

Top ZAR data releases:

Nov 16 ZAR Retail Sales (Sep)

 

CAD – Canadian Dollar Falls in Tandem with Oil Prices

The Canadian Dollar spent the first half of this week on the defensive, the commodity-sensitive currency coming under pressure as oil prices slumped. CAD exchange rates then began to recover in the latter half of the week amid a strong uptick in Canadian bond yields.

Next week will see the publication of Canada’s latest CPI figures. Another drop in domestic inflation last month could dent Bank of Canada (BoC) rate hike bets and push the ‘Loonie’ lower.

Top CAD data releases:

Nov 16 CAD Inflation Rate (Oct)

Nov 18 CAD Retail Sales (Sep)

Nov 18 CAD PPI (Oct)