Published: 04/11/2024 By ECAP
The British Pound weakened against its peers last week, falling after the new Labour government's first budget disappointed markets. Attention now turns to Thursday's Bank of England meeting, where a 25-basis point interest rate cut is anticipated. Although this cut is largely expected, any hints about a potential December cut could influence the Pound. However, recent budget developments have lowered those odds, providing some support for the currency.The Euro strengthened against a basket of currencies last week, supported by positive economic data from the Eurozone. In fact, recent reports showed faster than expected GDP growth in the third quarter, reducing expectations for significant interest rate cuts by the ECB in December. Additionally, inflation rose to 2% in October, further impacting rate cut speculations. Investors are now focused on upcoming manufacturing data and comments from ECB officials for guidance on interest rates.
The U.S. Dollar weakened following Friday's disappointing nonfarm payrolls data, indicating a gradual cooling in the U.S. labour market. Adding to this uncertainty, upcoming elections revealed a tight race between Donald Trump and Kamala Harris, with polls closing in before tomorrow’s vote. Moreover, market participants are also bracing for a potential 25-basis point rate cut by the Federal Reserve later this week.
Data supplied by GC Partners