This week is set to be one of the most influential of the quarter, with multiple central bank decisions, critical data releases, and market-moving speeches all landing in quick succession. For businesses and individuals with currency exposure, the next few days represent both an opportunity and a risk. This foreign exchange outlook highlights the events that matter most and explains how they may shape GBP, EUR, and USD movements.
Key Events This Week
- Monday (15 Sep): ECB President Christine Lagarde speaks at a policy conference, providing fresh insights on monetary direction.
- Tuesday (16 Sep): UK labour market report, Canadian CPI, and US retail sales, a packed day with data covering employment, inflation, and consumer demand.
- Wednesday (17 Sep): Bank of Canada interest rate decision, followed by the all-important Federal Reserve meeting and economic projections (the famous “dot plot”).
- Thursday (18 Sep): Bank of England interest rate decision.
- Friday (19 Sep): Bank of Japan policy decision wraps up the week.
This clustering of announcements ensures volatility across major pairs, with traders recalibrating expectations on growth, inflation, and interest rates.
GBP Outlook
Sterling is under the microscope with the UK labour market release on Tuesday and the BoE interest rate decision on Thursday. The jobs data will show whether wage pressures remain elevated or if the employment market is cooling. Stronger pay growth could delay BoE cuts, while evidence of slack in the jobs market may reinforce dovish expectations.
By Thursday, the BoE is expected to trim rates again. The tone of the statement will be critical, if policymakers stress a “gradual and careful” approach, markets may scale back expectations for deeper cuts. For GBP, this means potential downside if the vote split shows growing momentum toward faster easing, while a more cautious stance could give sterling some relief.
EUR Outlook
The euro starts the week with Lagarde’s speech. Any shift in tone around inflation, growth, or September’s policy direction could move EUR/USD immediately. Later in the week, eurozone data on retail sales, PPI, and industrial production will shape sentiment further, but the overarching driver is still monetary policy.
The ECB has so far been hesitant to commit to deeper cuts, but a softer run of data could make them unavoidable. For the euro, resilience depends on whether incoming numbers show that growth remains fragile but inflation sticky, or whether both sides of the equation are now weakening in tandem.
USD Outlook
The dollar is front and centre this week. On Tuesday, US retail sales will indicate whether consumer demand, the backbone of the economy, remains strong heading into Q4. Then Wednesday brings the Fed.
Markets expect the Fed to leave rates unchanged, but the tone of Jerome Powell’s press conference and the dot plot will decide whether September or December looks like the likeliest start for rate cuts. A hawkish message would lift the dollar across the board, while a dovish shift could trigger a broad sell-off.
Thursday’s weekly jobless claims and Friday’s follow-through will keep volatility high even after the Fed decision.
Other Currencies & Global Themes
- CAD: Inflation figures and the Bank of Canada decision on Wednesday will set the tone. A stronger CPI print could push the BoC toward patience, while softer numbers may invite an earlier cut.
- AUD & NZD: With limited domestic catalysts, these currencies will trade largely on global risk appetite. If the Fed signals patience, risk currencies could get a boost.
- JPY: The Bank of Japan’s decision on Friday is the final word of the week. Even modest tweaks to guidance on yields or intervention language could spark a sharp yen rally.
Geopolitical tensions, particularly around trade, remain a background driver, with safe-haven flows into USD and JPY likely if headlines turn sour.
How August Exchange Delivers Value
When markets are this busy, timing is everything. Here are some ways we’ve helped clients recently:
- Importers: A UK retailer facing a €500,000 invoice locked in a forward contract two months ago. With GBP/EUR now weaker, they avoided a £6,000 increase in costs.
- E-commerce Businesses: By using our multi-currency accounts, a marketplace seller reduced conversion charges on $20,000 weekly receipts, saving over £800 per month compared to their bank.
- Corporates with Overseas Payrolls: A client paying $1.5m per month in overseas wages structured layered forwards. This smoothed volatility, saving £10,000 across just three months.
- Family Offices / HNWIs: A private client transferring $5m over a quarter used a collar strategy to protect against downside but still benefit from a 0.7% improvement on part of their flow, a six-figure saving.
Each of these examples highlights how strategic planning in volatile weeks transforms risk into opportunity.
Fact of the Week
Did you know? Over 80% of global FX transactions involve the US dollar, making Fed policy decisions the single biggest driver of global foreign exchange markets.
Final Thoughts
This week’s foreign exchange outlook is dominated by central banks: the Fed, BoE, BoC, and BoJ all take centre stage. Layer that with CPI, retail sales, and jobs data, and volatility is guaranteed. For businesses and individuals with exposure, preparing ahead of these releases is essential. At August Exchange, we provide the tools, accounts, and hedging solutions to make sure you’re positioned to benefit, not suffer, when markets move.
