US economy is on the path to recovery
Daily Currency Update
The Pound is continuing its downfall, following key data for the markets to digest. It has been a difficult week for the pound. The Bank of England paused the interest rate hiking cycle, which is the first time the central bank hasn’t raised rates in 14 meetings and the surprise hold meant the currency lost ground quickly.Gross Domestic Product for the UK is due on Friday. The year-on-year figure is expected to remain at 0.4%. Any figures less than this will likely add to sterling’s woes.
On Wednesday the States released its Durable Goods Orders for September, which was expected to fall to -0.5% and would have been an improvement compared to the reading of -5.2% in the previous month. The actual release was at 0.2% which was a surprise of around 0.7% and adds to the argument that the United States is well on the path to recovery. We have GDP out at 13:30 today which reads the changes in the value of goods and services produced in the US and is expected at 2.2%.
Key Movers
Positive news in Europe showed that Core Inflation had started to settle, at least short term, at 5.3% year-on-year for August. German manufacturing PMI also indicated a recovery in their output, which has struggled since the gas crisis began. Capitalising heavily on GBP weakness the euro gained massively on sterling forcing the pairing to levels not seen in over 3 months.Now there is new optimism in Europe, investors are welcoming both Germany’s and the eurozone’s CPI releases on today and tomorrow respectively. Both expected to show a drop in inflation for September this could be early signs that the ECBs approach to inflation is working and providing support for a recovery.
Expected Ranges
- GBP/USD: 1.21200 - 1.21551 ▼
- GBP/EUR: 1.15464 - 1.15652 ▼
- GBP/AUD: 1.90282 - 1.91187 ▼
- EUR/USD: 1.04910 - 1.05188 ▼