Pound Weakness Possible as Bailey Speech Looms, Euro Sees Inflation Boost

A speech from Bank of England Governor Andrew Bailey is expected to influence GBP investors this week. If Bailey maintains a cautious stance on further monetary tightening, it could lead to a pound (GBP) weakening.

The euro (EUR) might see an initial boost due to the publication of the Eurozone's consumer price index for August. The preliminary figures are anticipated to show inflation rising above 3%, which could strengthen bets that the European Central Bank (ECB) will raise interest rates this month.

The US non-farm payroll report is likely to be a major driver of movement in the US dollar (USD). If employment growth falls short of expectations, it could weaken renewed Federal Reserve rate hike bets and weigh on the 'greenback'. Australia's latest GDP figures may provide support for the Australian dollar (AUD), with consensus forecasts suggesting a steady rate of expansion.