Tag Archives: USD

Today’s major focus is the ECB interest rate announcement, which is expected to be the same as in September, at 4.5%.

EU inflation numbers have improved in recent months, and the stronger-than-expected EU PMI figures earlier this week help support a pause in the ongoing ECB rises, which have been in place for the previous 9 consecutive months to help combat inflation.

President Lagarde’s speech follows the rate announcement, she will discuss the potential outlook on future hikes and if one more is necessary.

US unemployment claims and GDP figures are set to be released this afternoon. US GDP is forecast to rise by 1.9% from the previous quarter to 4.3%, demonstrating the economy is growing. 

This week, Pound Sterling has been the weakest performing currency, with no support level over 1.1500 against the Euro.

On the currency front, the dollar was retaining a weaker tone. As a result, the euro and sterling both gained ground versus the US dollar.

The UK unemployment rate, which was somewhat lower than expected at 4.2% in the three months to August, was already released in the macro diary.

Meanwhile, we’ll get flash PMIs from the Eurozone, the United Kingdom, and the United States throughout the day. They will provide an early indication of how these economies will fare at the start of Q4.

In September, the PMIs were generally weak across regions and industries (both manufacturing and services). Overall, the consensus predicts similarly modest outcomes in October.

GBP begins the week on the back foot, having fallen to its lowest level in five months against the euro last week.

Today is incredibly light on the data calendar with only the EU Consumer Confidence figures due out at 3pm. Confidence is likely to come in weaker than the last month which is no real surprise given the uncertainty on a global level.

There are several important data releases later in the week with potential implications for interest rates.

For the UK this week, we have the Employment & PMI – Manufacturing & Services numbers due tomorrow.

Tuesday is looking like a key day for the Pound, given the release of PMI survey data for October in both the UK and Eurozone. Markets will be keeping a close eye on this data, likely to be favouring the currency belonging to the economy which puts in a better-than-expected performance relative to the other.

Currency markets remain volatile. Concerns that the current Israel-Hamas conflict may widen out into a broader regional crisis continue to dominate the markets, and on the back of this we are seeing the US dollar benefit significantly, as well as other safe haven assets. 

Yesterday’s macro calendar was heavily focused on the United States. There were some mixed findings in terms of data. The weekly unemployment claims figure came in somewhat higher than expected.

The main emphasis of yesterday’s US macro diary was Fed Chair Powell’s speech at the Economics Club of New York. His remarks were mainly neutral in tone. They imply that a rate hike in November is unlikely.

Powell did, however, indicate in the Q&A that he did not believe policy was overly tight at the present. Overall, his words support the idea that interest rates would remain higher for longer.

The announcement of lower-than-expected UK retail sales for September this morning has offered a negative start to the day for sterling. The rest of today’s macro schedule is quite calm on both sides of the Atlantic.