Benefits of subscribing

Currencies included: USD, EUR, GBP, ZAR, AUD and NZD

 

Data releases and relevant current affairs for the week

Currency movement forecasts, market analysis and expected data release results

Important events and predicted effects on currencies

 

Read all our Weekly Market Watch reports

 

Market predictions and forex forecasts for the week of 29 August 2022.

weekly market predictions for the week ahead

Week starting 29-08-2022

 
 

We have excluded the Russian Ruble from the analysis in our report due to the extreme volatility associated with the currency. All data valid as of Monday 29/08/2022 17:00 GMT.

 

USD

  • Last week, the US Dollar’s most notable downside movements were against the Brazilian Real (BRL) (-2.64%) and the Polish Złoty (PLN) (-1.23%), whilst the largest gains were against the Japanese Yen (JPY) (0.92%) and the Chinese Yuan (CNY) (0.87%).

  • The USD’s moves were muted throughout the week, with a positive skew as the week progressed. The market was awaiting the keynote speech by Fed Chair, Jerome Powell, at the annual Jackson Hole Symposium on Friday. As he delivered his address, he reiterated the Fed's commitment to raise rates and his view that the economy was still strong. The market seemed to back the USD and the currency strengthened. On Thursday, the second estimate of quarter-on-quarter GDP growth for Q2 came in at -0.6% – further confirmation of GDP contraction in the US. On Friday, personal income, and personal spending both increased, which is closely watched by the Fed, as these figures are its preferred measure of growth in the economy. So, in the eyes of the Fed, things are still looking good, as consumers are earning more and spending more. As the new week began, the USD lost quite a bit of its strength yesterday (29 August).

  • This week, there will be a range of data being released to show the current US employment situation. On Wednesday, the ADP employment change for July will be released and is expected to increase substantially. This is followed by initial jobless claims, which will be released on Thursday and are expected to remain constant at 243,000. Finally, the highly anticipated nonfarm payrolls data will be released on Friday. We expect this to be a massive market mover as it is predicted to drop from the extreme 528,000 figure last month, to a more realistic 300,000. Any deviation from this will be a definite cause for market volatility.

EUR

  • After an extremely volatile week of trading, the Euro strengthened most notably against the JPY (1.49%) and the CNY (1.37%), whilst the greatest downside pressures were against the BRL (-2.09%) and the PLN (-0.67%).
  • Every week, the Euro is being influenced by geopolitical factors, namely the war in Ukraine and the supply of Russian natural gas (or, rather, the lack thereof) to the Euro area. This is severely impacting consumer sentiment and growth prospects for the Eurozone, but most of all, Germany – the EU’s largest economy. The actual data in the EU has been scarce, thus the market is mostly trading on headlines and consumer sentiment.
  • On Wednesday, there will be tangible data in the form of flash inflation data for August. We expect both year-on-year and month-on-month inflation to edge higher as the cost of energy and power in the EU remains at historically high levels. This is followed by PPI data for July, which will be released on Friday. PPI is expected to remain high, which indicates the worst is yet to come for the EU’s inflation.

GBP

  • The British Pound had another disappointing week, with the currency weakening against 15 of the top 19 currencies we monitor. The most notable moves to the downside were against the BRL (-3.09%) and the PLN (-1.67%), whilst the largest gains were against the JPY (0.52%) and the CNY (0.42%).
  • There was minimal UK data last week, with the major events focusing on multiple strike actions in the UK as the cost-of-living crisis deepens. Energy prices are one of the major catalysts to this, but the remnants of Brexit are also a factor, as the previous free trade agreements between the EU and UK weigh on trade and impacts the cost of living.
  • It will be a shortened trading week in the UK, with a bank holiday yesterday (29 August). This week, there will again be minimal UK data, so we look to see if the currency can regain some of its shine after a few weeks of rather dismal performance. Additionally, we expect the market to be rather subdued before the final vote to see who the new British Prime Minister will be. Currently, polls favour Truss over Sunak. The results will be released on 5 September.

ZAR

  • The South African Rand had some respite after a week where the currency initially weakened quite dramatically but ended in the green and strengthened against 16 of the 19 currencies we monitor. The most notable gains were against the CNY (1.95%) and the JPY (1.87%), whilst the most significant weaknesses were against the BRL (-1.74%) and the PLN (-0.94%).
  • The main event last week was the inflation data for July. Year-on-year inflation hit heights last seen in the global financial crisis of 2008. This could signal that the South African Reserve Bank will be even more aggressive in its rate-hiking cycle going forward, thus we can expect further rate hikes in the future.
  • This week, there will be limited South African data, so we will look to global factors to influence the movements in the ZAR. A minor event to monitor is the balance of trade for July, which is expected to narrow. This is not surprising as energy import prices increased, and gold prices dropped.

AUD

  • The Australian Dollar had another week of gains, most notably against the JPY (1.38%) and the Turkish Lira (TRY) (1.1%), whilst the most impactful losses were against the BRL (-2.31%) and the Norwegian Krone (NOK) (-0.43%).
  • Last week, there was minimal data from Australia, so the market moved in part from momentum and in part from a move to some less-risky currencies.
  • For Australian data this week, retail sales data was released on Monday. This came in higher than expected, signaling more robust spending than anticipated and was AUD-positive. Aside from this, there will be limited Australian data. We will monitor to see if the AUD can hold on to the gains it made over the past few weeks.

NZD

  • The New Zealand Dollar had a disappointing week and lost ground against 13 of the 19 currencies we monitor. The greatest losses were against the BRL (-2.91%) and the PLN (-1.45%), whilst the largest gains were against the JPY (0.85%) and the CNY (0.37%).
  • Last week’s main event was retail sales data from New Zealand, which declined on a year-on-year and quarter-on-quarter basis, which is never a positive sign for the economy.
  • This week, the ANZ business confidence index will be released on Wednesday. We expect confidence to remain low and thus a generally negative outlook overall for New Zealand.

If you would like further information on the market along with personalised hedging strategies for you or your business, you can get in touch with our team at fxhedging@sableinternational.com.

Interested in keeping up with the market watch? Subscribe now for weekly updates

* indicates required

We are a professional services company that specialises in cross-border financial and immigration advice and solutions.

Our teams in the UK, South Africa and Australia can ensure that when you decide to move overseas, invest offshore or expand your business internationally, you'll do so with the backing of experienced local experts.