All eyes on the Bank of England’s rate cut decision

Daily Currency Update

The British pound extended its losing streak last week, with GBP/USD falling to a seven-month low of 1.3097 before closing at 1.3152, down 1.19% - making it the weakest performer among the G-10 currencies. Sterling remained under pressure as investors favoured the US dollar following Fed Chair Powell’s hawkish remarks and diminishing expectations of further US rate cuts.

At home, concerns over the UK’s deteriorating fiscal outlook and slowing growth fuelled expectations of Bank of England rate cuts, further weighing on sentiment toward the pound.

The euro also weakened for a second straight week, with EUR/USD down 0.77% to 1.1537 after touching a three-month low of 1.1522. The decline reflected both external and domestic headwinds - continued dollar strength and easing eurozone inflation, which slipped to 2.1% in October. Core inflation held steady at 2.4%, while services inflation rose to 3.4%, keeping the European Central Bank cautious about signalling an end to its inflation fight.