Published: 05/11/2024 By ECAP
The British Pound rose slightly against its peers yesterday, recovering from a recent slump. Investors are focused on this week’s Bank of England meeting, where a quarter-point rate cut is expected. Despite recent political and economic uncertainty, including a high-spending budget and lowered growth forecasts, investors are closely watching BoE Governor Andrew Bailey for clues on future policy and the potential for another rate cut in December.The Euro rose against most peers after Eurozone's October manufacturing PMI data slightly exceeded expectations, improving from 45.0 to 46.0, though still indicating contraction. While the data showed slower declines in production and orders, the euro’s gain was mainly driven by a weaker U.S. dollar, benefiting from the negative correlation between the two currencies. This offset the ongoing recession in the manufacturing sector.
The U.S. Dollar slipped as markets focused on the tight U.S. presidential election and the upcoming Federal Reserve meeting. With the race between Donald Trump and Kamala Harris tightening, volatility increased ahead of today’s vote. Moreover, investors also anticipated a 25-basis point rate cut by the Fed at the end of its two-day policy meeting on Thursday, further contributing to the dollar's retreat.
Data supplied by GC Partners