Friday 11th October
The pound (GBP) gained momentum last Friday, supported by the release of the UK’s latest GDP data. The figures revealed that the UK economy grew in August for the first time since May, easing concerns that the strong growth seen earlier in the year had fully waned.
The euro (EUR) struggled on Friday due to increasing worries about the Eurozone economy. Investors are becoming more anxious that the region may be approaching a recession, as consumer activity across the bloc continues to weaken.
The US dollar (USD) ended Friday on a weaker footing after the University of Michigan’s US consumer sentiment index unexpectedly dropped. USD demand also suffered despite US producer price index data beating forecasts, as it showed that price growth had slowed further last month.
Thursday 10th October
The pound (GBP) faltered on Thursday as new concerns over the forthcoming Autumn Budget resurfaced. Reports indicated that the government’s plans to raise revenue were in disarray, with under three weeks remaining before Chancellor Rachel Reeves is set to reveal the budget. This unsettled GBP investors, causing recent optimism to fade quickly.
The euro (EUR) saw mixed performance on Thursday, despite the European Central Bank’s (ECB) September meeting minutes being less dovish than anticipated. Policymakers signalled a gradual lowering of interest rates, but the minutes did little to curb expectations of two further rate cuts this year, especially after more recent remarks from ECB officials.
The US dollar (USD) fluctuated on Thursday but ended the day stronger against several currencies. This movement followed US inflation data, which showed that price pressures cooled only slightly in September, with inflation easing from 2.5% to 2.4%, falling short of expectations.
Wednesday 9th October
The pound (GBP) climbed higher during Wednesday’s trading, buoyed by reports that UK Chancellor Rachel Reeves is planning to amend the government’s debt rules. This potential change would enable increased borrowing, raising hopes among GBP investors that the Chancellor will have more flexibility to invest in infrastructure.
The euro (EUR) struggled on Wednesday, following dovish comments from European Central Bank (ECB) officials. ECB policymaker Martins Kazaks indicated that further interest rate cuts are needed due to the Eurozone’s economic weakness, while François Villeroy de Galhau reinforced this sentiment, stating that another rate cut is highly likely.
The US dollar (USD) saw modest gains early on Wednesday, benefiting from risk-averse market sentiment. However, USD investors remained cautious ahead of the Federal Reserve’s September policy meeting minutes. Once released, the minutes boosted the USD further, as they revealed most Fed policymakers are not expecting another significant rate cut in November.
Tuesday 8th October
The pound (GBP) edged higher on Tuesday, despite the absence of fresh data, as it appeared to recover from oversold conditions. Speculation surrounding Chancellor Rachel Reeves potentially adjusting the government’s fiscal rules ahead of the upcoming budget also provided a boost, as investors viewed the move as a chance to create more room for investment.
The euro (EUR) initially gained on Tuesday, thanks to a stronger-than-expected rebound in German industrial production. However, the euro lost momentum later in the session, pressured by dovish remarks from European Central Bank (ECB) official Mārtiņš Kazāks.
The US dollar (USD) remained firm on Tuesday, benefiting from cautious market sentiment. The safe-haven currency gained ground against its riskier counterparts, but its appeal was limited by the lack of significant US data and investor caution ahead of key events scheduled later in the week.
Monday 7th October
The pound (GBP) struggled on Monday as expectations grew that the Bank of England (BoE) could lower interest rates more aggressively than anticipated. After dovish comments from BoE Governor Andrew Bailey last week, some analysts now believe there is support for consecutive rate cuts in both November and December.
The euro (EUR) saw mixed movement on Monday after the release of uneven economic data. A sharp drop in German factory orders initially weighed on the euro, though the currency found some support later in the session following an improvement in Eurozone retail sales.
The US dollar (USD) gained strength on Monday, as investors reduced their expectations for a large rate cut from the Federal Reserve next month. Stronger-than-expected payroll data from Friday led to the near-complete removal of bets for a 50bps rate cut in November.
Friday 4th October
The pound (GBP) experienced a rebound at the close of last week’s trading, influenced by remarks from Bank of England (BoE) Chief Economist Huw Pill. His statements aimed to cool speculation regarding interest rate cuts, which had surged after BoE Governor Andrew Bailey’s comments led to a significant decline in the pound, hinting at a potential aggressive approach to rate reductions.
The euro (EUR) faced challenges on Friday, impacted by its inverse relationship with the US dollar and cautious remarks from a European Central Bank (ECB) official. Speculation regarding an additional rate cut from the ECB this month gained traction after Mario Centeno indicated that inflation in the Eurozone is now being managed effectively.
The US dollar concluded last week strongly, buoyed by a robust non-farm payroll report revealing that the US economy created 254,000 jobs in September. This data suggests a more resilient labour market than previously anticipated, prompting USD exchange rates to strengthen as investors adjusted their expectations regarding another 50 basis point interest rate cut from the Federal Reserve in the coming month.
Thursday 3rd October
The pound (GBP) experienced a significant drop on Thursday as traders reacted to remarks made by Bank of England (BoE) Governor Andrew Bailey. In a Guardian interview, Bailey indicated that the BoE might adopt a “more aggressive” stance on interest rate reductions, causing Sterling to fall by more than 1% against several currencies.
The euro (EUR) managed to regain some ground yesterday, buoyed by better-than-expected economic indicators from the Eurozone. The final services PMI for September was revised upward to 51.4, surpassing the previous estimate of 50.5. Additionally, Eurozone producer prices increased by 0.6% in August, exceeding predictions of a 0.3% rise, which somewhat mitigated expectations for a rate cut from the European Central Bank (ECB).
The US dollar (USD) found support yesterday amid a risk-averse market atmosphere and decreasing expectations for another 50 basis point cut from the Federal Reserve, enhancing the dollar’s attractiveness. A significantly stronger ISM services PMI for September contributed to the dollar’s strength in the afternoon, revealing that the US services sector experienced its most robust growth since February 2023.
Wednesday 2nd October
The pound (GBP) remained within a tight trading range yesterday as fresh concerns emerged regarding the UK’s forthcoming Autumn Budget. Reports indicated that Chancellor Rachel Reeves might propose substantial cuts to infrastructure spending, contradicting Labour’s commitment to increase investments aimed at stimulating economic growth.
The euro (EUR) showed limited movement on Wednesday following remarks from European Central Bank (ECB) Vice-President Luis de Guindos. He cautioned that “risks to growth are still tilted to the downside,” raising worries about potential challenges for the Eurozone economy.
The US dollar (USD) began the day somewhat flat, despite the ongoing uncertainty surrounding developments in the Middle East. Later in the afternoon, USD exchange rates began to strengthen after a robust ADP employment report eased fears about possible interest rate cuts from the Federal Reserve.
Tuesday 1st October
The pound (GBP) experienced a mixed day yesterday, struggling against stronger currencies following the release of the UK’s final manufacturing PMI. With results aligning with the preliminary estimate, there was limited movement. Nevertheless, a decline in factory activity and falling business confidence weighed on the pound.
The euro (EUR) declined yesterday, reaching new multi-month lows against several currencies after the release of the Eurozone’s September consumer price index. The latest CPI data indicated a drop in inflation from 2.2% to 1.8% last month, falling short of expectations and slipping below the European Central Bank’s (ECB) 2% target. This led to increased speculation about a potential interest rate cut, further weakening the single currency.
The US dollar (USD) rose yesterday as a risk-averse market sentiment heightened demand for the safe-haven currency, following reports of Iran’s plans to attack Israel. Additionally, the latest Job Openings and Labor Turnover Survey (JOLTs) supported the dollar, revealing an unexpected increase in new job vacancies.
Monday 30th September
The pound (GBP) firms throughout yesterday’s session as a generally positive market mood boosts this increasingly risk-sensitive currency. However, these gains remain modest after the UK’s final GDP figure for the second quarter shows a downward revision in growth.
The euro (EUR) trends lower today, following the release of Germany’s latest consumer price index. September’s preliminary CPI data indicates inflation slows to just 1.6%, marking the slowest rate of price growth in over three years, which fuels speculation for another interest rate cut from the European Central Bank (ECB) later this month.
The US dollar (USD) initially remains subdued as an increase in US Treasury yields provides some support for the ‘greenback,’ though this is largely offset by risk-on flows. Later in the evening, USD exchange rates surge following comments from Federal Reserve Chair Jerome Powell, who indicates that the bank is not in a hurry to reduce interest rates.
Currency Ranges for the month:
GBP/USD: Low: High:
GBP/EUR: Low: High:
EUR/USD: Low: High: