UK: Weekly FX Market Update 27 October

GBP

• Sentiment surrounding sterling appears negative, with UK GDP flatlining and the country facing more tax hikes and spending cuts next month. Not a pretty sight.

• The market is pricing in a 100% likelihood of US Federal Reserve cutting rates by 0.25% on Wednesday. Will this impact GBPUSD?

• As we start the run-in to the Nov 26^th budget, will we see GBPUSD at 1.3000 soon?

EUR

• As the market looked at new sanctions from the EU and US on Russia, the Euro traded quietly.

• EU preliminary GDP and CPI are released on Thursday morning.

• With the ECB expecting interest rates to stay steady at 2%, is the Euro becoming an investor haven with geopolitical risks increasing?

USD

• The federal government remains shutdown, currently the second-longest shutdown in history.

• US inflation has been rising, yet the Federal Reserve is given 100% chance of cutting interest rates by Bloomberg analysts on Wednesday.

• With the rate-cutting policy at odds with the economic theory textbooks, could there be votes of dissent in the FOMC voting, encouraging USD strength?

Main events for this week:

Mon Oct 27

09:00 EUR German IFO Business Climate

Tue Oct 28

05:00 JPY BoJ Core CPI

Wed Oct 29

13:45 CAD Bank of Canada (BoC) Int Rate Decision/Statement

14:30 CAD BoC Press Conference

18:00 USD FOMC Int Rate Decision/Statement

18:30 USD FOMC Press Conference

Thu Oct 30

05:00 JPY Bank of Japan (BoJ) Int Rate Decision/Statement

05:30 JPY BoJ Press Conference

07:00 EUR German Prelim CPI

10:00 EUR Prelim Flash GDP

13:15 EUR ECB Int Rate Decision/Statement

13:45 EUR ECB Press Conference

23:30 JPY Tokyo CPI

Fri Oct 31

10:00 EUR Flash CPI

12:30 CAD GDP

13:30 USD FOMC Logan Speaks

16:00 USD FOMC Bostic Speaks