UK: Weekly FX Market Update 3 November
GBP
As investors continue the long run up to the Budget, sterling moves lower, possibly encouraged by calls for a rate cut this week.
The BoE sets rates on Thursday. With a weak economic backdrop and high inflation, Bloomberg analysts expect no change in rates. However, Goldmans, Barclays and Nomura all think it could happen.
Can the dollar continue its rebound and push GBPUSD back to 1.3000?
EUR
The ECB held rates steady last week, pushing GBPEUR to lows not seen since May 2023.
The Euro did hold its own against the dollar and gained against the Yen.
Can EURUSD stay supported until year end and then push higher on USD weakness in 2026?
USD
Fed Chair Powell pours cold water on investors’ dovish intentions for December.
He doesn’t want to drive too fast in the fog without economic data releases showing a clear direction.
Will this be the longest US government shutdown ever? The US economy seems to be able to bear the cost at the moment, with a White House memo saying that the shutdown is costing US$ 15 billion each week.
Main events for this week:
Mon Nov 3
15:00 USD ISM Manufacturing PMI/Prices
Tue Nov 4
03:30 AUD RBA Int Rate Decision
04:30 AUD RBA Press Conference
Wed Nov 5
13:15 USD ADP Employment Change
15:00 USD ISM services PMI
Thu Nov 6
10:00 EUR Retail Sales
12:00 GBP BoE Int Rate Decision/Monetary Policy Summary
Fri Nov 7
13:30 CAD Employment Data
15:00 USD Prelim UoM Consumer Sentiment/Inflation Expectations
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