US Dollar reaches 10-month highs
Daily Currency Update
This week is relatively light on macroeconomic news compared to the data we’ve seen recently.In the UK, we have GDP data due on Friday which will give us a good indication on economic growth within the region. We also have US durable goods order data on Wednesday, and revised Q2 GDP Thursday, which could impact the dollar. Any major headlines out of FOMC chair Powell’s speech on Thursday will definitely gain the market's attention.
The September CPI report is due out of the Euro Area on Friday, any downside surprise here could all but eliminate the possibility of additional ECB rate hikes, which could weigh further on the euro.
Key Movers
The US dollar has remained the top performer out of the G10 currencies this week, extending its gains versus almost every other currency in the world yesterday.As things stand, futures markets are pricing in around a 50/50 chance of another 25-basis point hike by year-end, so there remains room for additional dollar gains should this transpire to be the case. Markets are clearly buying into the narrative of ‘higher US rates, for longer’ – which is a clear dollar positive. While most of the world’s major central banks appear to be reluctant to raise interest rates any further, the Fed indicated in its September meeting that there is a possibility of another US rate hike.
Expected Ranges
- GBP/USD: 1.21353 - 1.21642 ▼
- GBP/EUR: 1.14908 - 1.15132 ▼
- GBP/AUD: 1.89644 - 1.90670 ▲
- EUR/USD: 1.05530 - 1.05741 ▲