Central bank decisions in focus
Daily Currency Update
US data on Friday came in the form of Core Personal Consumption Expenditure Price Index (month-on-month) and revised Consumer Sentiment. The September personal income and spending report shows that inflation remains sticky, coming in at 0.3%. Consumer Sentiment rose from the previous reading and forecast 63.0 to 63.8.This data ran alongside the Euro Summit, following the European Central Bank leaving its benchmark interest rate unchanged at 4.5% on Thursday last week. GBP/USD closed the week in the middle of its recent range between 1.2080 and 1.2180. Today started at around 1.2120. The Euro is sitting higher against both the Pound and the US Dollar. GBP/EUR is at around 1.1460 and EUR/USD at 1.0580.
Central banks will be in focus this week with Bank of Japan (BoJ), Bank of England (BoE) and the US Federal Reserve (Fed) all giving guidance about future interest rate decisions. It is widely expected that all banks will leave their decisions unchanged – BoJ -0.1%, BoE 5.25% and Fed 5.5%.
Key Movers
Keeping the focus on the week ahead, key economic activity readings will be given from China and the monthly US labour report. China’s manufacturing and non-manufacturing PMI are due to give expansion readings above 50.0 but not extended from the previous release.US JOLTS job openings, ahead of the interest rate decision from the Fed, is forecast to be lower than the previous 9.61m with 9.27m predicted. Alongside this, market participants will have an eye on developments in the Middle East. A risk off approach from investors will likely see the USD, CHF, and JPY benefit. Investors tend to move towards safer assets in times of uncertainty.
Expected Ranges
- GBP/USD: 1.2080 - 1.2170 ▼
- GBP/EUR: 1.1440 - 1.1503 ▼
- GBP/AUD: 1.8870 - 1.9120 ▼
- EUR/USD: 0.054 - 1.0610 ▲