US Dollar Rocked by PPI Release, Pound Fluctuates as Jeremy Hunt Delivers Autumn Budget
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 Ukraine War Concerns
The Euro opened this week on solid footing, underpinned by a positive Eurozone industrial production release and improving German economic sentiment. A missile strike on Poland then swiftly reversed these gains. While it was quickly established this was likely not a Russian missile, fears the war is spilling over into the rest of Europe kept the pressure on the Euro.
Likely driving movement in the Euro next week will be the Eurozone’s latest PMI figures. Will another contraction in the bloc’s private sector send the single currency lower?
Top EUR data releases:
Nov 23 EUR Manufacturing PMI (Nov)
Nov 23 EUR Services PMI (Nov)
Nov 24 EUR German IFO Business Climate (Nov)
USD – US Dollar Rebounds from Multi-Month Lows in Bearish Trade
USD exchange rates plummeted to multi-month lows in the first half of this week. A weaker-than-expected US PPI release fed into speculation the Federal Reserve will take its foot off the accelerator with future interest rate hikes. However the US Dollar was able to recoup a good portion of these losses in the latter half of the week as market sentiment soured.
The publication of the minutes from the Fed’s November policy meeting will likely be the focus for USD investors next week. The ‘Greenback’ potentially strengthening if they indicate the bank may be more open to another 75bps rate hike than investors are currently pricing in.
Top USD data releases:
Nov 22 USD Durable Goods Orders (Oct)
Nov 22 USD Services PMI (Nov)
Nov 22 USD FOMC Minutes
GBP – Pound Rocked Following UK’s Autumn Budget
The Pound trended broadly higher through the first half of this week, with GBP investors shrugging off some mixed UK data releases amid an improving market mood. The publication of the UK’s Autumn Statement then infused volatility in Sterling through the second half of the week as Chancellor Jeremy Hunt outlined his tax and spending plans while also confirming the country faces a prolonged recession.
Turning to next week, the Pound could face headwinds with the publication of the UK’s latest PMIs as a deeper contraction in private sector growth is likely to add to recession concerns.
Top GBP data releases:
Nov 22 GBP Public Sector Borrowing (Oct)
Nov 23 GBP Manufacturing PMI (Nov)
Nov 23 GBP Services PMI (Nov)
AUD – Australian Dollar Buoyed by Hawkish RBA Minutes
Trade in the Australian Dollar was mixed this week. Initially firming after the minutes from the Reserve Bank of Australia’s (RBA) latest meeting proved more hawkish than expected, the ‘Aussie’ then wobbled as AUD investors were unimpressed by Australia’s latest jobs report.
AUD investors are likely to be focused on a speech by RBA Governor Philip Lowe at the start of next week. Will Lowe reiterate that the bank remains open to a 50bps rate hike in the future?
Top AUD data releases:
Nov 22 AUD RBA Lowe Speech
Nov 22 AUD Manufacturing PMI (Nov)
Nov 22 AUD Services PMI (Nov)
ZAR – Rand Fluctuates in Mixed Trade
The South African Rand traded in a wide range over the past week. ZAR exchange rates fluctuated on the back of mixed retail sales figures, shifting market risk appetite and more loadshedding from Eskom.
The South African Reserve Bank’s (SARB) latest interest rate decision will be in the spotlight for ZAR investors next week. Another 75bps rate hike from the SARB could help to bolster the Rand in the latter half of the week.
Top ZAR data releases:
Nov 23 ZAR Inflation Rate (Oct)
Nov 24 ZAR Business Confidence (Q4)
Nov 24 ZAR SARB Interest Rate Decision
CAD – Canadian Dollar Falls in Tandem with Oil Prices
The Canadian Dollar trended lower through this week’s session, with the commodity-linked currency struggling to draw support as oil prices slumped.
Canada’s latest retail sales figures will be the only CAD data release of note next week. Will a contraction in sales growth at the end of the third quarter push the ‘Loonie’ lower?
Top CAD data releases:
Nov 22 CAD Retail Sales (Sep)
Nov 22 CAD BoC Rogers Speech