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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

 

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Market predictions and forex forecasts for the week of 15 November 2021.

Weekly market report for the week ahead

Week starting 15-11-2021

 

USD

  • Over the past week, we have seen the USD strengthen against most of the top 20 currencies. We saw an upward movement against 16 of the top 20, the most notable being against the Turkish Lira (TRY) (3.24%) and the ZAR (2.47%). The Dollar weakened against the Brazilian Real (BRL) (-1.54%) and the Indonesian Rupiah (IDR) (-0.50%).
     
  • On the data front, year-on-year US inflation increased by 6.2% from a previous figure of 5.4%. Authorities claim this is purely transitory and will not remain once the effects of Covid spending wear off.
     
  • On Tuesday, we have US retail sales data. This is expected to come in higher than before, moving from a figure of 0.7% to 1.1%. If we do see this move, we should see some USD strength follow.
     

EUR

  • The EUR traded generally lower over the past week, weakening against 12 of the top 20 currencies. The most notable weakness was seen against the BRL (-2.56%) and the Chinese Yuan (CNY) (-1.41%), whilst the greatest gain was seen against the TRY (1.99%) and the ZAR (1.31%).
  • On the data front, tensions are escalating between Russia and Belarus, which is a risk factor to consider going forward.
  • This week, we have the GDP data for the European Union and the Euro area releasing on Tuesday. The GDP data is expected to remain stable at 2.2% QoQ. Any deviation from this could result in volatility in the EUR.

GBP

  • In the past week, the GBP offered quite a mixed bag, with the GBP weakening against 10 of the top 20 currencies. The most notable weakness was seen against the USD (-0.97%) and the BRL (-2.45%), whilst the most notable upwards move was seen against the TRY (2.09%) and the ZAR (1.45%).
  • On the data front, we saw some disappointing data from the UK in the form of lower-than-expected quarter-on-quarter and year-on-year GDP growth. They came in at 1.3% and 6.6% respectively and underperformed by approximately 0.2% from the consensus.
  • This week, we have the UK unemployment rate on Tuesday. This is expected to drop from 4.5% to 4.4%. On Wednesday, the year-on-year inflation data is releasing and is expected to come in at 3.9% from a lower level of 3.1%. If both these figures come out as anticipated, we expect the GBP to rise, whereas if we see a miss, we can expect the GBP to fall.

ZAR

  • The ZAR saw weakness across the board, weakening against 19 of the top 20 currencies. The only outlier was a slight 0.29% gain against the TRY. The most notable weaknesses were against the BRL (-3.46%) and the USD (-2.48%).
  • The main event from the past week has been the Medium Term Budget Policy Statement (MTBPS). The new finance minister, Enoch Godongwana, maintained the stance from his predecessor, Tito Mboweni, stating that the country needs to maintain the path to fiscal consolidation. The ZAR did not have any major swings post-MTBPS.
  • This week’s main event is the year-on-year inflation rate, expected to be unchanged at 5%. This figure is at the top end of the South African Reserve Bank’s (SARB) target range, so a move higher could possibly trigger the SARB to raise interest rates.
  • On Thursday we have the South African interest rate decision. The rate is expected to remain stable at 3.5%. Any deviation from this would result in big swings in the ZAR.

AUD

  • The AUD saw a generally mixed trade over the past week, weakening against 11 of the top 20 currencies, the most notable being against the BRL (-2.41%) and the IDR (-1.55%). The AUD strengthened against the TRY (2.10%) and the ZAR (1.41%).
  • On the data front, we had both business and consumer confidence increase for the previous period. While this was positive, it was counteracted by an increase in the unemployment rate, from 4.6% to 5.2%.
  • Coming up, the most notable event is the release of the Reserve Bank of Australia’s (RBA) meeting minutes on Tuesday. This will give the market an indication of RBA policy going forward.

NZD

  • The NZD weakened against all but five of the top 20 currencies. We saw the most drastic moves against the IDR (-2.08%) and the USD (-1.52%), whilst there was upwards movement against the TRY (1.29%) and the ZAR (0.79%).
  • The only event in New Zealand this past week was the PMI data for October coming in higher at 54.3 from 51.4. The PMI data points to producers expecting a positive move going forward.
  • This week, the Reserve Bank of New Zealand (RBNZ) is releasing inflation expectations data on Thursday. This is forecast to increase, which is positive for the NZD.

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