As we look ahead to next week’s big budget announcement, the pound sterling goes into the budget as one of the best performing major currencies in 2024, thanks to the Bank of England’s cautious approach to interest rate cuts in the face of better-than-expected economic data in the first half of the year.
A well-received budget and a consistent approach to rate drops by the Bank can support Sterling’s outperformance, particularly against the Euro and other European currencies.
Currency-wise, the main pairings remained within extremely narrow trading ranges. The weak price activity was most likely due to insufficient data schedules. The dollar continued to rise even though there were little moves to report.
Turning to the day ahead, the data calendar on both sides of the Atlantic remains relatively sparse. In the Eurozone, the flash reading of consumer confidence is forecast to inch higher to –12.5 in October from –12.9. Elsewhere, US existing home sales data for September are due. However, neither release is likely to make the weather for either the euro or the dollar today.
Meantime, public remarks from a number of central bank officials, including ECB President Lagarde and BoE Governor will be under the spotlight once again. From the Fed, comments by Governor Bowman, the sole dissenter from the September FOMC meeting, will also warrant attention
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