Home Daily Commentaries US economy powers ahead after stellar Q3 GDP data

US economy powers ahead after stellar Q3 GDP data

Daily Currency Update

The Euro remained steady after the ECB left its benchmark interest rate unchanged as markets expected. The Governing Council said that high-interest rates are dampening demand and are bringing inflation slowly lower.

Sterling has failed to find sustained support this week after economic releases came in better than expected. Policymakers in the UK have been rather vocal about this being the end of interest rate hikes and this has been weighing on Sterling.

In the US the Dollar remains firm. Treasury yields are rising again, and this is underpinning the UD Dollar. Q3GDP in the states came in at 4.9% vs market expectations of 4.2%. Despite this, the Dollar’s reaction has been relatively muted.

Key Movers

In Europe, the ECB will hold a press conference to discuss their decision to leave rates unchanged today. Guidance on what they expect through Q4 ’23 and Q1 next year will be key to the Euro’s direction from here. In the UK there is no more data out this week so all eyes will be on trendline support at the psychological 1.2000 level. A breach of this could see the currency dip into next week.

The US economy has remained resilient in the face of significant global headwinds. The market awaits the Federal Reserve interest rate meeting next week with trepidation after today's Q3 GDP numbers hugely outperforming expectations. All eyes will be on the guidance the Fed gives at their post-interest rate press conference.

Expected Ranges

  • GBP/USD: 1.2050 - 1.2200 ▲
  • GBP/EUR: 1.1430 - 1.1530 ▲
  • GBP/AUD: 1.9050 - 1.9150 ▲
  • EUR/USD: 1.0520 - 1.0630 ▲