Friday 27th September
The pound (GBP) remained weak on Friday amid concerns surrounding the upcoming UK Autumn Budget in late October. Reports suggest Chancellor Rachel Reeves is reconsidering the scrapping of non-dom tax status, as it may not generate the expected revenue. This has led to speculation that Labour could either increase borrowing or find alternative ways to raise taxes..
The euro (EUR) faced challenges towards the end of the week, as inflation in both France and Spain cooled more than anticipated in September. Initial data indicated a continued decline in price pressures in two of the Eurozone’s largest economies, increasing expectations of another interest rate cut by the European Central Bank (ECB) in October.
Meanwhile, the US dollar (USD) weakened on Friday after the release of US inflation data showing a slowdown in price growth for August. The latest PCE price index revealed that headline inflation had dropped to 2.2% last month, the lowest since February 2021. This reinforced market speculation of a potential 50bps interest rate cut from the Federal Reserve in November.
Thursday 26th September
The pound (GBP) saw moderate gains on Thursday, supported by an improvement in overall market sentiment. Despite this, Sterling’s upward movement was capped by a British Retail Consortium report indicating a decline in UK consumer confidence, driven by worries over the forthcoming Autumn Budget.
The euro (EUR) weakened on Thursday, as improved risk sentiment reduced the appeal of the safe-haven currency. Nonetheless, the single currency’s losses were cushioned by Germany’s latest consumer confidence data, which showed a slightly stronger-than-expected outlook for October.
Meanwhile, the US dollar (USD) declined during Thursday’s trading, as growing expectations of a significant 50bps interest rate cut from the Federal Reserve in November weighed on the currency. This selling pressure persisted even though US economic data, including stronger-than-forecast durable goods orders and jobless claims, along with a second-quarter GDP growth confirmation of 3%, was released later in the day.
Wednesday 25th September
The pound (GBP) lacked clear direction on Wednesday, with the absence of UK economic data leaving the currency adrift. The risk-sensitive pound was influenced by overall market sentiment, and broad risk aversion caused GBP to weaken against safer currencies.
The euro (EUR) managed to strengthen against riskier counterparts mid-week, benefiting from the cautious market atmosphere. However, the euro’s strong inverse relationship with the rising US dollar (USD) led to some of those gains being erased later in the day.
The US dollar, considered a safe haven, saw an increase in value on Wednesday as the recent optimism in global markets faded. Investors became more cautious due to growing concerns over escalating violence in the Middle East, particularly Israel’s intensified military actions in Lebanon.
Tuesday 24th September
The pound (GBP) found support during Tuesday’s session following remarks from Bank of England (BoE) Governor Andrew Bailey. In an interview with KentOnline, Bailey indicated that UK interest rates will decrease “gradually,” reinforcing the view that the BoE will take a less aggressive approach compared to other central banks in tightening its monetary policy.
The euro (EUR) gained some ground on Tuesday, benefiting from its negative correlation with the US dollar (USD). However, the single currency’s rise was limited, as data revealed that German business sentiment fell to its lowest level in eight months in September.
The US dollar weakened on Tuesday after new stimulus measures introduced by China boosted risk appetite, reducing demand for safe-haven currencies. This decline was further exacerbated by a sharp drop in the US consumer confidence index, marking its steepest fall in over three years.
Monday 23rd September
The pound (GBP) remained muted during Monday’s session after the release of a mixed UK services PMI. Although growth in the important services sector was slower than expected, the report showed some underlying resilience, which helped to ease significant downward pressure on Sterling.
The euro (EUR) slumped on Monday following weaker-than-expected PMI data from the Eurozone. Preliminary figures for August revealed the private sector contracted for the first time since January, with a sharp decline in Germany’s manufacturing sector raising concerns that the Eurozone’s largest economy may already be in recession.
The US dollar (USD) had a mixed start to the week. While the dollar initially gained on Monday as disappointing Eurozone PMI figures rattled markets, these gains were later erased as the US session progressed, with investors increasingly expecting another 50bps interest rate cut from the Federal Reserve.
Friday 20th September
The pound (GBP) saw an initial rise on Friday after UK retail sales figures exceeded expectations, coming in at 1% compared to the anticipated 0.4%. However, some traders opted to take profits, which led to a swift reduction in Sterling’s gains. Concerns about the Labour government’s potentially challenging budget next month may have further weighed on GBP interest.
The euro (EUR) experienced fluctuations on Friday, lacking direction due to an absence of new data from the Eurozone. Despite this, the euro managed to gain ground against riskier currencies as market sentiment turned negative.
The US dollar (USD) faced a subdued start on Friday following the Federal Reserve’s 50 basis point interest rate cut. Nonetheless, it managed to recover some losses as risk appetite diminished, increasing demand for the safe-haven currency. Heightened tensions in the Middle East contributed to the unrest in global markets.
Thursday 19th September
The pound (GBP) found some support yesterday following the Bank of England’s (BoE) decisive decision to maintain interest rates during its September meeting. Despite this alignment with market forecasts, Sterling struggled to gain ground against stronger currencies.
The euro (EUR) experienced downward pressure amid a generally risk-on market atmosphere. Hawkish remarks from key European Central Bank (ECB) figure Isabel Schnabel helped to cushion the euro’s losses, yet they did not provide sufficient momentum for a significant rebound.
Initially, the US dollar (USD) weakened as investors processed the Federal Reserve’s substantial 50 basis point interest rate cut announced on Wednesday. Eventually, the dollar managed to recover some losses due to a drop in US initial jobless claims from the previous week. Still, the overall performance for the ‘greenback’ remained lower by the end of the day.
Wednesday 18th September
The pound (GBP) gained strength yesterday after the latest consumer price index in the UK surpassed expectations, reinforcing the belief that the Bank of England (BoE) will maintain interest rates in today’s meeting. While headline inflation remained steady in August, the core inflation rate rose from 3.3% to 3.6%, exceeding the forecast of 3.5%. This indicates ongoing price pressures within the UK economy.
The euro (EUR) remained flat yesterday, hindered by a lack of significant data from the Eurozone that left the currency struggling for support. A generally optimistic market environment also caused the euro to weaken against its riskier counterparts.
The safe-haven US dollar (USD) experienced a decline yesterday as a risk-on sentiment took hold ahead of the anticipated interest rate cut from the Federal Reserve. Later in the evening, the Fed announced a substantial half-point reduction, leading to an initial drop in the ‘greenback’ before it recovered some of its losses.
Tuesday 17th September
The pound (GBP) moved in a narrow range throughout yesterday’s trading session due to a lack of significant data impacting the currency. Investors seemed cautious as they awaited several important UK economic reports scheduled for release later in the week.
The euro (EUR) faced challenges in gaining support on Tuesday, following the release of Germany’s latest ZEW economic sentiment survey. The index for September showed a significant decline in confidence, marking the third consecutive drop in sentiment and representing the worst reading in nearly a year.
The US dollar (USD) also traded within a tight range yesterday, with investors remaining cautious ahead of the Federal Reserve’s upcoming interest rate decision. Despite this, the ‘greenback’ managed to avoid further declines, bolstered by stronger-than-expected US retail sales figures reported on Tuesday.
Monday 16th September
The pound (GBP) experienced a broad increase during yesterday’s trading session, supported by a more positive market sentiment. Expectations that the Bank of England (BoE) will maintain interest rates this month, diverging from the approaches of the European Central Bank (ECB) and the Federal Reserve, also bolstered Sterling’s gains.
The euro (EUR) faced mixed pressures on Monday. A prevailing risk-on sentiment acted as a drag on the single currency, but this was somewhat offset by remarks from ECB officials suggesting that the bank is not in a hurry to continue reducing interest rates.
The US dollar (USD) encountered widespread weakness at the beginning of the week, as market expectations shifted towards a potential 50 basis point interest rate cut from the Federal Reserve on Wednesday. Data from CME’s FedWatch tool indicated that the likelihood of this more aggressive cut rose to 65%, up from just 30% a week prior.
Friday 13th September
The pound (GBP) remained steady towards the end of last week, consolidating its earlier gains. Analysts suggested that further upward movement was unlikely, with some cautioning that the currency might have been overvalued in recent weeks.
The euro (EUR) saw mixed performance on Friday. Weighing on the currency were the European Central Bank’s (ECB) recent interest rate reduction and disappointing industrial production data from the Eurozone. However, the euro found some support due to its inverse relationship with the weakened US dollar (USD).
The US dollar struggled at the close of last week, having taken a hit on Thursday after domestic producer price data fell short of expectations. Weaker-than-anticipated producer prices in August fuelled speculation that the Federal Reserve may cut interest rates by 50 basis points this week, dampening demand for the USD on Friday.
Thursday 12th September
The pound (GBP) held steady on Thursday after a report warned that UK debt could triple over the next 50 years. The Office for Budget Responsibility (OBR) projected that the national debt could climb to 270% of GDP by the latter half of the century, driven by an ageing population, environmental challenges, and security concerns.
The euro (EUR) remained quiet as the European Central Bank (ECB) announced its second interest rate reduction of the year. Since markets had already factored in the cut, the impact on the euro was minimal, even as the ECB lowered its growth projections.
The US dollar (USD) faced pressure on Thursday following the release of the latest US producer price index. Unlike consumer prices, underlying manufacturing sector inflation came in lower than expected for August, fuelling speculation of a Federal Reserve rate cut and weighing on the dollar.
Wednesday 11th September
The pound (GBP) struggled on Wednesday as investors were disappointed by the latest UK GDP report. Data from July showed the UK economy had stagnated instead of growing by the anticipated 0.2%, causing Sterling to weaken and fueling speculation that the Bank of England (BoE) might lower interest rates in November.
The euro (EUR) edged lower during Wednesday’s trading, pressured by its inverse relationship with the US dollar (USD). Caution among EUR investors also grew as they awaited the European Central Bank’s (ECB) upcoming interest rate decision, leading to limited movement.
The US dollar gained strength on Wednesday after the release of the latest US consumer price index. While headline inflation for August slowed more than expected, a surprise rise in month-on-month core inflation reduced the likelihood of a significant Federal Reserve rate cut next week.
Tuesday 10th September
The pound (GBP) showed initial strength yesterday following the UK’s latest jobs report, which revealed a drop in unemployment to a six-month low for July. However, the pound’s gains were short-lived as worries about a slowdown in wage growth caused Sterling to give up most of its earlier advances by the afternoon.
The euro (EUR) found it difficult to gain traction on Tuesday, with the primary focus being Germany’s latest consumer price index. The finalised CPI data for August confirmed a slowdown in inflation to 1.9%, its lowest level since March 2021.
The US dollar (USD) remained relatively stable yesterday as investors held back from making significant moves ahead of today’s US CPI report. This cautious stance limited any potential gains for the dollar, despite a subdued market sentiment and a slight increase in US Treasury yields.
Monday 9th September
The pound (GBP) showed little movement at the beginning of the week due to the lack of significant UK economic data. Sterling was vulnerable to the prevailing negative risk sentiment throughout Monday.
The euro (EUR) struggled on Monday, affected by its inverse relationship with the US dollar (USD). Investors in the euro were cautious, holding back from making bold moves as they awaited the European Central Bank’s (ECB) upcoming interest rate decision later in the week.
The US dollar started the week on a strong note, benefiting from a risk-averse market environment that boosted demand for the safe-haven currency. Concerns over a potential US recession heightened market uncertainty and supported the USD, while a rise in US Treasury yields further bolstered the dollar’s position during Monday’s session.
Friday 6th September – On Friday, the pound (GBP) showed strength against most major currencies, except the US dollar (USD). Despite a lack of new UK economic data, Sterling remained buoyant, driven by expectations that the Bank of England (BoE) will implement rate cuts more gradually compared to other central banks.
The euro (EUR) ended the week on a weak note. Investors were disappointed by the revised Eurozone GDP growth estimate for the second quarter, which was adjusted downward from 0.3% to 0.2%. This revision reflected the impact of inflation and elevated interest rates on consumer spending and investment within the Eurozone.
The US dollar (USD) experienced volatile trading on Friday, influenced by the release of the latest non-farm payroll figures. Initially, the USD fell after August payrolls came in below expectations. However, the currency quickly recovered as investors reacted positively to stronger-than-anticipated wage growth in the US.
Thursday 5th September
The pound (GBP) strengthened slightly, buoyed by a cautiously optimistic market sentiment. Despite this, gains for Sterling were limited due to the absence of new UK data to support GBP exchange rates.
On Thursday, the euro (EUR) saw a modest rise, fueled by favourable data. This increase was largely attributed to an unexpected rise in German factory orders for July, along with a rebound in Eurozone retail sales during the same period.
The US dollar (USD) faced challenges yesterday, following a disappointing ADP employment report which revealed only 99,000 new jobs in August, well below the anticipated 145,000. However, the dollar’s losses were partially offset by the ISM services PMI report, which showed an unexpected increase in growth for the US services sector, reaching a three-month high in August.
Wednesday 4th September
The pound (GBP) experienced modest gains, boosted by the latest UK services PMI data. The final August index, which showed an upward revision in sector growth, bolstered confidence in the UK’s economic performance.
On Wednesday, the euro (EUR) faced mixed influences from Eurozone data. Although a surprising increase in the region’s producer price index lent support to the currency, its potential for further gains was limited by a downward revision in Eurozone service sector growth for the previous month.
The US dollar (USD) struggled during yesterday’s trading as concerns about a cooling labour market emerged. The latest Job Openings and Turnover Survey (JOLTs) revealed a drop in new job openings to their lowest level since early 2021, adding to the dollar’s challenges.
Tuesday 3rd September
The pound (GBP) edged up against most major currencies, buoyed by modest expectations for Bank of England (BoE) interest rate cuts. Investors continue to view the BoE’s current rate-cutting pace as slower compared to the Federal Reserve and the European Central Bank (ECB).
On Tuesday, the euro (EUR) remained relatively flat due to mounting concerns about Germany’s economic situation. Investors are increasingly anxious about the Eurozone’s largest economy, especially with reports of potential closures at two Volkswagen factories.
The US dollar (USD) gained traction during yesterday’s trading, driven by a risk-averse market that sought the safety of the currency. Nonetheless, gains for the ‘greenback’ were limited in the afternoon as the latest ISM manufacturing PMI revealed ongoing contraction in the US manufacturing sector.
Monday 2nd September
On Monday, the pound (GBP) saw modest gains, buoyed by a generally positive market sentiment. Sterling also benefited from the UK’s latest manufacturing PMI, which confirmed that factory sector growth reached a two-year high in August.
At the start of the week, the euro (EUR) found support from the Eurozone’s revised manufacturing PMI, which was slightly upgraded for August. Although the index exceeded expectations, it still indicated contraction in the bloc’s factory sector, which limited further gains for the euro.
The US dollar (USD) experienced a lack of clear direction as US markets were closed for the extended Labor Day weekend. Despite this, an increase in US Treasury yields contributed to a strengthening of the dollar in overnight trading.
Currency Ranges for the month:
GBP/USD: Low: 1.3013 High: 1.34299
GBP/EUR: Low: 1.17785 High: 1.20291
EUR/USD: Low: 1.10072 High: 1.12066