Opaque Markets
GBP: The British Pound remains under significant pressure due to anticipation of the November budget and the falling UK bond yields. As discussed by the OBR earlier this week, there are concerns over a very significant budget shortfall combined with downgraded productivity forecasts which have deepened selling. However, some in the market are pointing to technical indicators which are showing that the pound has potentially been oversold. Overall, budget anticipation and anxiety continue to dominate with there being no clear direction for the pound until the budget.
EUR: The Euro has remained subdued with the market awaiting the ECB decision and the key data releases today. Many in the market are expecting there to be no interest rate cut, helping to support the Euros recent stability. However, if there is a rate cut or one is indicated by Christine Largade there is scope for Euro weakening. Overall, the Euro is expected, by most, to remain stable however this is dependent on the ECB and key data releases today.
USD: The Federal Reserve cut the rate, as widely expected, by 25 basis points however Fed Chair Jerome Powell has seemingly dampened the expectation of any further aggressive interest rate cuts. We are yet to see how this will be interpreted by the market with dollar strength being reliant upon the market interpreting his remarks as cautious and not dovish. Overall, the US Dollar remains mixed with scope for movement depending on how the markets interpret Powell’s direction.
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