UK: Weekly FX Market Update 4 November 2024

GBP

• Investors sold Sterling last week after Chancellor Reeves announced a huge tax and spend budget.

• The Office For Budget Responsibility said it was ‘one of the largest fiscal loosenings of any fiscal event in recent decades’.

• Taking a more positive view, the IMF endorsed the budget and its ‘envisaged reduction in the deficit over the medium term’.

EUR

• Last week, data indicated that the Monthly Eurozone CPI refused to decline.

• Q3 Eurozone GDP growth was stronger than expected, supporting the Euro.

• Can EURUSD strength be sustained?

USD

• It seems like we have been waiting for an eternity, but finally, the US election is here.

• Election staff have been improving the speed of vote counting, as well as security.

• Some states have changed their election laws, and as a result we may not get final result for days or even weeks.

• In 2016 when President Trump was elected, the US Dollar moved sharply lower before strongly gaining. Will we see that again this year?

Main events for this week:

Mon Nov 4

09:30 EUR Sentix Investor Confidence

Tues Nov 5

All Day US Election

03:30 AUD Reserve Bank Australia Interest Rate Decision

15:00 USD ISM Services PMI

Wed Nov 6

14:45 USD Final Services PMI

Thu Nov 7

07:00 EUR German Industrial Production

12:00 GBP Bank of England Interest Rate Decision

13:30 USD Unemployment Claims

19:00 USD Federal Reserve Sets Interest Rates

19:30 USD Federal Reserve Chair Powell Press Conference

Fri Nov 8

12:15 GBP Bank of England Economist Pill Speaks

15:00 USD Preliminary Consumer Sentiment/Inflation Expectations