Next week a run of economic reports could trigger extensive market movement. Here’s our forecast for the ones most likely cause currency volatility.
Pound Sterling (GBP) Exchange Rate Forecast
The Pound Sterling (GBP) exchange rate had a bit of a disastrous run this week, being battered left right and centre by a wave of negative news from the UK. The British asset hit multi-week and multi-month lows against several of its major currency counterparts after UK wage growth data showed that average earnings are increasing at less than half the rate of inflation. The Pound’s bearish attitude was cemented by the Bank of England’s decision to slash its forecast for future wage growth in the quarterly inflation report. Next week the major UK data to be aware of include; Rightmove House Price figures, the UK’s Consumer Price Index, minutes from the latest Bank of England meeting, Retail Sales figures and Public Finance data. If these fundamentals fail to impress the Pound Sterling exchange rate may continue trending lower for the foreseeable future.
Australian Dollar (AUD) Exchange Rate Forecast
The Australian Dollar managed to claw its way back above 93 US cents over the course of this week as the US Dollar faltered following an easing in global tensions and disappointing domestic retail sales figures. The Australian Dollar to Pound Sterling exchange rate also strengthened in response to unexpectedly positive Business Confidence and Consumer Confidence reports for Australia. The domestic House Price Index also impressed. The most market-moving Australian reports to be aware of next week include; Australia’s Wespac Leading Index, Conference Board Leading Index and ANZ Consumer Confidence Index. China’s HSBC Manufacturing PMI will also be of interest to investors. If this run of Australian figures also happens to surprise to the upside, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate could extend this week’s losses.
Canadian Dollar (CAD) Exchange Rate Forecast
As tensions in Ukraine, Iraq and Gaza eased slightly from the feverish pitch struck at the close of last week, commodity-driven currencies like the Canadian Dollar were able to recover their footing to a certain degree. While the Canadian Dollar spent much of the week trending in a narrow range with the US Dollar, less-than-thrilling advance retail sales figures for the US helped the ‘Loonie’ rally against the ‘Greenback’, and the Canadian Dollar was additionally supported by on-target Canadian housing data. The gains in the Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate were largely due to Pound weakness. A small stream of influential economic reports is scheduled for release in Canada next week, including the nation’s Wholesale Sales figures, Retail Sales data and Consumer Price Index. If inflation is shown to have moved closer to the Bank of Canada’s target it could prove supportive for the Canadian Dollar (CAD) exchange rate.
Stay tuned for all the latest exchange rate news and future currency forecasts!
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