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October 28, 2024Cross-Border
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UK: Weekly FX Market Update 28 October 2024

GBP

  • Sterling has been under pressure, fending off the strengthening US Dollar, as the UK awaits next week’s budget.

  • Wednesday sees the budget finally arrive, though many details have been leaked ahead of time. Chancellor Reeves has said that the £22 billion budget deficit hole will have to be filled by spending cuts and tax rises.

  • Meanwhile, new government ‘investment’ debt rules may be introduced to help propel the economy forward.

  • Will the market give her the thumbs up or thumbs down? Will the pound recover its recent losses?

EUR

  • The ECB has been giving mixed signals recently, with President Lagarde appearing to open the door to a 0.5% rate cut in December by saying that the pace of cuts was ‘not guaranteed’.

  • However, she also seemed to slam the door shut the following day by talking about ‘caution’ taking precedence over rate cuts.

  • Meanwhile, Goldman Sachs considers that if Donald Trump is elected President and enacts his tariff plans and tax cuts, it’s possible that EURUSD could fall by 10% to below parity.

  • Wednesday sees Eurozone GDP data released, and Eurozone CPI on Thursday. Will the results give more clarity to the ECB’s interest rate plans?

USD

  • A recent Financial Times poll puts Trump in the lead as the stronger candidate to led the economy, showing an advantage over Harris.

  • Media sources are mostly reporting the US election race to be neck-and-neck. However, Trump leads in some swing state polls, so the market is currently preparing for a second Trump term by buying US Dollars.

  • US GDP data is set to be released on Wednesday, with the US employment report following on Friday. If they show another set of strong numbers, will the US Dollar strengthen again prior to the US election?


Main events for this week:

Mon Oct 28

17:30 CAD Bank of Canada Governor Macklem Speaks

Tue Oct 29

00:01 GBP BRC Shop Price Index

14:00 USD Consumer Confidence

Wed Oct 30

00:30 AUD CPI

07:00 EUR German Preliminary CPI

10:00 EUR Preliminary GDP

12:30 USD Advance GDP

12:30 GBP Autumn Forecast Statement

Thu Oct 31

00:30 AUD Retail Sales

05:00 JPY Bank of Japan Policy rate/Outlook Report

05:30 JPY Bank of Japan Press Conference

10:00 EUR CPI Flash Estimate

12:30 USD Core Personal Consumption Expenditure Price Index

Fri Nov 1

07:30 CHF CPI

12:30 USD Non-Farm Payrolls/Unemployment Rate/Average Hourly Earnings

14:00 USD ISM Manufacturing PMI

About the author

Trevor Charsley

Trevor Charsley

Senior Market Strategist

Trevor has over 25 years' trading and sales experience. He produces regular market and technical analysis as well as help with the structure and management of FX hedging policies. Trevor is often listed among the top "currency forecaster on Bloomberg".