The past couple of weeks have been marked by considerable weakness in the US dollar resulting from dovish signals from the Federal Reserve.
During this time, we’ve seen GBP/EUR climb from €1.16 to €1.18, while EUR/GBP retreated from £0.85 to £0.84.
Meanwhile, GBP/USD leapt from $1.27 to a two-year high of $1.32, while EUR/USD accelerated from $1.09 to $1.12.
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Staying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks…
What’s been happening?
The US dollar has plummeted over the last fortnight, with the currency’s most notable losses following a speech by Federal Reserve Chair Jerome Powell, in which he conceded that the ‘time has come’ for the bank to begin cutting US interest rates.
In contrast, the pound has strengthened over the past couple of weeks, with the currency drawing support from some positive UK economic releases as they trimmed Bank of England (BoE) rate cut bets.
Meanwhile, trade in the euro has been mixed. While the single currency has benefitted from its negative correlation with the US dollar, it has also faced resistance as a result of positive risk appetite and underwhelming Eurozone data.
What do you need to look out for?
Looking ahead, the immediate focus will be the Eurozone’s latest consumer price index. August’s preliminary figures are expected to report a sharp cooling of inflation, which could weaken the euro if it stokes bets for a rate cut from the European Central Bank (ECB) next month.
For USD investors the spotlight will be on the latest US payrolls. Could another underwhelming release spark similar volatility in the US dollar to the previous month’s data?
Finally, while GBP economic data is thin on the ground over the next couple of weeks, the current optimism over the UK economy may allow the pound to maintain a positive trajectory.
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