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Market predictions and forex forecasts for the week of 14 March 2022.
Week starting 14-03-2022
We have excluded the Russian Ruble from the analysis in our report due to the extreme volatility associated with the currency
- The US Dollar had a mixed performance last week weakening against 10 of the top 19 currency pairs. The largest losses were against the Polish Złoty (PLN) (-4.38%) and the Swedish Krona (SEK) (-2.72%), whilst the largest gains were against the Turkish Lira (TRY) (3.54%) and the Japanese Yen (JPY) (2.21%).
- For US data, inflation hit multi-year highs with the added pressure of increased fuel prices. Sanctions against all facets of the Russian economy have grown and will affect the global economy.
- This week, the highly anticipated US Fed interest rate decision will release on Wednesday. Although analysts were expecting a 0.5% rate hike, those expectations have moderated to a 0.25% increase with the current geopolitical climate and the increased pressure felt by consumers worldwide due to higher fuel prices.
- The Euro’s performance took a turn for the better after a few dismal weeks. The EUR strengthened against 13 of the top 19 currency pairs. The largest gains were against the TRY (3.72%) and the JPY (2.8%), whilst the largest losses were against the PLN (-3.84%) and the SEK (-2.15%).
- The most significant Eurozone data last week was the European Central Bank’s interest rate decision. It kept rates unchanged at 0%, which was expected by analysts, but they did raise the GDP growth expectations, and with that the probability of future interest rate hikes.
- This week, we will monitor the continuous developing conflict in Ukraine and the effects of this on Europe. For Eurozone data, we will track inflation data, which will release on Thursday, where we expect to see new multi-year highs.
- The Pound had a less than perfect week, weakening against 13 of the top 19 currency pairs. The largest downside moves were against the PLN (-5%) and the SEK (-3.31%), whilst the upside gains were against the TRY (2.94%) and the JPY (1.52%).
- Last week, the global market sentiment was the main factor influencing the GBP. Retail sales increased along with a higher-than-expected GDP growth over the past period.
- On Thursday, the Bank of England will announce its interest rate decision. We expect this to be quite an event as the market expects a 0.25% rate hike, bringing the interest rate to 0.75%. In the rare case of it not raising rates, the GBP would weaken drastically.
- The South African Rand was a shining star over the past week, strengthening against 17 of the top 19 currency pairs. The Rand weakened against the PLN (-2.39%) and the SEK (-0.45%) and strengthened the most against the TRY (5.46%) and the JPY (4.33%).
- There was very little South African data last week. The main factor keeping the ZAR afloat has been the soaring precious metals prices. Thus, the ZAR broke critical barriers of GBP/ZAR 20 and USD/ZAR 15 over the past week. In addition to this, the ZAR remained strong despite the reimplementation of loadshedding.
- This week, we do not expect significant South African data. However, we remain cautious regarding this bout of ZAR strength. Global factors and the interest rate decisions from the US and UK will be the main events to watch to determine the Rand’s upcoming strength.
- The Australian Dollar took a break from its incredible performance over the past month. The AUD weakened against 15 of the top 19 currency pairs. The largest weaknesses were against the PLN (-5.17%) and the SEK (-3.51%), whilst strengthening against the TRY (2.25%) and the JPY (1.39%).
- For data, there was not much from Australia last week. We expected that the AUD’s extremely positive moves would take a break at some point, and this is what happened last week.
- On Tuesday, the Reserve Bank of Australia’s meeting minutes will be released. This will give the market some guidance regarding the bank’s outlook on the future of the interest rate movements.
- The New Zealand Dollar had a generally bad week, but nothing too outrageous. The NZD weakened against 12 of the top 19 currency pairs. The largest losses were against the PLN (-4.83%) and the SEK (-3.14%) whilst the largest gains were against the TRY (2.63%) and the JPY (1.86%).
- New Zealand has recently taken a hit from growing Covid infections. Although the numbers are quite high, mortality is low, which is good news. There has not been much to report from the data front.
- Coming up this week, the GDP growth figures will be released on Wednesday.
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