UK: Weekly FX Market Update 28 September

GBP

• Sterling falls 1.5% as investors price in a US rate hike cycle.

• BoE Governor Bailey announces that the Bank can’t wait for conclusive evidence on inflation before hiking, saying ‘It's going to be too late by then.’

• Deutsche Bank publishes a short GBPUSD recommendation. They focus on risks around the October budget & BoE policy as ‘skewed negatively’.

EUR

• The Euro declines 1% in the face of a stronger US Dollar & heightened political risk in Germany & France.

• Bundesbank President Nagel says that the ECB may need to be ‘mildly restrictive’ on interest rates.

• Morgan Stanley publishes a short EURUSD recommendation. Forecasting EURUSD to weaken to 1.1000 by mid-2027.

• Friday’s Eurozone CPI release could be directional for investors.

USD

• As investors considered a US rate hike cycle accompanied by hawkish Fed commentary, the USD had its best two-week run in six months.

• Better-than-expected September US PMI data last week possibly encouraged higher US Treasury prices & a stronger US Dollar.

• Will Wednesday’s PCE & Friday’s Non-Farm Payrolls data releases support even more US Dollar strength?

Mon Sep 28

11:00 GBP MPC Ramsden Speaks

12:00 GBP Chancellor Healey Speaks

13:15 USD FOMC Breeden Speaks

14:30 EUR ECB President Lagarde Speaks

18:25 USD FOMC Cook Speaks

18:30 USD FOMC Barkin Speaks

Tue Sep 29

05:30 AUD Reserve Bank Australia Rate Decision

08:00 CHF KOF Economic Barometer

11:00 EUR Bundesbank President Nagel Speaks

12:00 GBP PM Burnham Speaks (Tentative Timing)

12:00 EUR ECB President Lagarde Speaks

15:00 USD Consumer Confidence/JOLTS Job Openings

16:00 GBP MPC Mann Speaks

16:30 GBP MPC Taylor Speaks

17:40-20:00 USD Various FOMC Speakers

Wed Sep 30

All Day CAD Holiday

07:00 GBP Current Account/Final GDP QoQ

07:00 EUR German Prelim CPI

13:30 USD Core Personal Consumption Expenditure/Final GDP

18:30 – 23:00 USD Various FOMC Speakers

Thu Oct 1

07:30 CHF CPI

09:00 GBP BoE Governor Bailey Speaks

14:30 EUR ECB President Lagarde Speaks

15:00 USD FOMC Waller Speaks/ISM Manufacturing PMI

18:30 – 23:45 USD Various FOMC Speakers

Fri Oct 2

00:30 JPY Tokyo Core CPI

10:00 EUR CPI Flash Estimate

13;30 USD Average Hourly Earnings/Non-Farm Payrolls/Unemployment rate