Euro gains ground on Inflation data
Daily Currency Update
The Pound had a mixed session on Friday, slipping back below 1.34 against the US Dollar. This came despite renewed expectations of Federal Reserve rate cuts and concerns over a potential US government shutdown weighing on the Greenback. Persistent expectations of further Bank of England rate cuts and uncertainty surrounding the UK’s fiscal outlook ahead of the Autumn Budget continue to exert downward pressure on Sterling.Against the Euro, however, the Pound fared slightly better. After an early dip to 1.146 following stronger-than-expected Eurozone inflation data, it recovered to close around 1.152 by the end of the session.
The US Dollar outperformed most majors on Friday, reversing all of Thursday’s losses against the Euro to close around 1.1665 EUR/USD and regaining much of its ground against the Pound, finishing near 0.7447. Despite mounting concerns over a potential government shutdown, widespread protests, and weakening consumer confidence, the USD has held up relatively well under the pressure.
Key Movers
The Euro saw a similar pattern of movement against both the USD and GBP on Friday. It made solid gains early in the session after stronger-than-expected inflation data (2.4% y/y vs. 2.3% expected) provided a brief boost, reversing much of the previous day’s losses. However, those gains faded as the day progressed, leaving the Euro little changed by the close.In early trading today, the Euro has picked up modestly against the Pound, supported by ongoing concerns around the UK’s fiscal outlook ahead of remarks from ECB officials Isabel Schnabel and Joachim Nagel later today.
Expected Ranges
- GBP/USD: 1.34 - 1.346 ▼
- GBP/EUR: 1.146 - 1.153 ▼
- GBP/AUD: 2.06 - 2.07 ▼
- EUR/USD: 1.164 - -0.832 ▲