Home Daily Commentaries Quiet day ahead of busy week

Quiet day ahead of busy week

Daily Currency Update

Data released on Friday showed a rise in German business sentiment in October, surpassing forecasts at 86.5 and providing some hope for relief in the economy's ongoing struggles with industrial challenges and weak global demand. Also on Friday, U.S. durable goods orders for September revealed a 0.8% decline, largely driven by a drop in transportation equipment; excluding transportation, new orders actually rose by 0.4% month-on-month.

Over the weekend, the geopolitical situation in the Middle East has cooled. Airstrikes by Israel against Iran did not target oil or nuclear facilities as feared, which leaves room for de-escalation and whether Iran will retaliate. This has improved risk sentiment, which will have eased market participants buying safe haven currencies like USD, CHF or JPY.

GBP/USD is trading just below 1.3000, currently at 1.2970, while GBP/EUR fluctuates around the 1.2000 mark. Meanwhile, EUR/USD has climbed back above 1.0800 this morning, reaching as high as 1.0840 on Friday.

Key Movers

Monday is thin on economic data releases, but the weak ahead brings Eurozone third-quarter GDP and inflation, and the UK budget. The former will likely guide markets on how aggressively the European Central Bank (ECB) will cut interest rates going forward. Early speculation is growing that ECB policymakers will agree to a larger rate cut at the next meeting. The UK's Labour government is set to present its inaugural budget on Wednesday, with markets closely monitoring for any potential surprises from Chancellor Rachel Reeves.

In other news, Japan’s ruling coalition lost its parliamentary majority in the weekend elections, putting pressure on the Japanese Yen. The Liberal Democratic Party, along with its junior partner Komeito, won 215 lower house seats, falling short of the 233 needed for a majority, likely leading to coalition negotiations. This outcome may limit the government's ability to implement planned rate hikes. The Pound reached 199.30 against the Yen, EUR/JPY touched 166.00, and USD/JPY fell just shy of 154.00.

Expected Ranges

  • GBP/USD: 1.2940 - 1.3010 ▲
  • GBP/EUR: 1.1970 - 1.2020 ▲
  • GBP/AUD: 1.9530 - 1.9770 ▲
  • EUR/USD: 1.0760 - 1.0870 ▲

Written by

Alex Hartley

OFXpert

Driven by a passion for currency markets and data movement, Alex finds great appeal in the dynamic nature of the industry. With over 20 years of experience, Alex works closely with businesses to understand their foreign exchange requirements and align them with solutions. Placing a strong emphasis on customer service, he takes pride in nurturing long-lasting relationships with clients.