Mixed Markets
GBP: The British Pound remains under pressure with the Autumn budget continuing to dominate sentiment. There is growing uncertainty over the Bank of England’s policy with some in the market expecting there to be interest rate cuts which has resulted in a fall in gilt yields. However, short-term technical indicators are pointing to that sterling has potentially been oversold giving scope to a potential short-term recovery. Overall, Sterling’s outlook remains cautious with it being dominated by worries of the budget.
EUR: The Euro strengthened slightly after the European Central Bank left interest rates unchanged and expressed confidence in the Eurozone’s economic outlook. The ECB highlighted steady growth and reaffirmed its commitment to maintaining stability. Markets welcomed the calm tone, viewing it as a sign of policy continuity and resilience in the region’s economic performance.
USD: The U.S. Dollar remained firm after the Federal Reserve’s 25-basis-point rate cut and announcement that quantitative tightening will end in December. A hawkish tone from Chair Jerome Powell, emphasizing data dependence and no preset path for further cuts, bolstered dollar strength. However, some analysts warn that the dollar’s momentum may fade as global growth and interest rates converge.
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