As we head into the second full week of May, currency markets remain on edge, with a packed economic calendar and lingering geopolitical tensions continuing to steer sentiment. Here’s a quick breakdown of what we’re watching this week, and how it could influence GBP, USD, EUR, and the wider G10 pack.
UK: Spotlight on GDP and Jobs Data
- The big one lands Thursday: Q1 UK GDP figures. After months of mixed signals from the UK economy, this print will either confirm or challenge the recent cautious optimism around the pound. Markets are hungry for signs of sustained growth.
- Tuesday gives us labour market stats, including wage growth. This matters: resilient earnings could feed into inflation expectations, possibly forcing the BoE to hold rates longer than anticipated.
US: Inflation, Retail Sales, and Fed Noise
- All eyes on Wednesday’s CPI release. A softer number may revive hopes for a September rate cut, while any surprises to the upside could see the dollar gain ground.
- Retail sales out Thursday will show how resilient the US consumer still is. With sticky inflation and high rates, consumer spending trends will be closely watched.
Eurozone: GDP & Inflation Check-In
- A fairly quiet week, but Eurozone GDP and final CPI data (both Wednesday) will shape expectations for ECB action in June. With inflation continuing to soften, markets are pricing in rate cuts sooner rather than later.
Beyond the Big Three: G10 Movers to Watch
- AUD: Watch for wage price index and labour market data this week. With RBA in focus, surprises here could shift AUD positioning.
- JPY: Yen remains weak despite recent BoJ jawboning. Expect volatility if US yields shift or further interventions are hinted.
- CAD: Housing data and wholesale trade figures land this week. Oil prices also remain key to CAD momentum.
Geopolitics: Tensions Still Simmering
- Headlines from the Middle East and ongoing trade frictions between major economies continue to add a risk-off undertone.
- US-China relations and upcoming EU parliamentary discussions may drive short-term positioning across major pairs.
Currency Exchange Perspective
As markets navigate data and uncertainty, businesses exposed to foreign currencies need to stay proactive. Recent GBP/USD moves have shown ~1.2% swings over short periods, and EUR/USD isn’t far behind. Managing timing and locking in favourable levels is key.
At August Exchange, we help clients mitigate these swings with tailored currency exchange strategies including forward contracts, options, and free exposure analysis.
