The second half of October brought more volatility as investors tried to gauge whether another Federal Reserve interest rate rise was on the cards.
During this time, we’ve seen GBP/EUR fall from €1.15 to €1.14, while EUR/GBP has climbed from £0.86 to £0.87.
Meanwhile, GBP/USD fluctuated between $1.20 and $1.22, while EUR/USD moved between $1.05 and $1.06.
Latest currency news
Staying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks…
What’s been happening?
The US dollar initially weakened in mid-October as dovish comments from Fed policymakers weighed on USD. However, stronger US economic data helped the ‘greenback’ recover.
The euro capitalised on the dollar’s weakness, due to the currencies’ negative correlation, before ceding its gains as the European Central Bank (ECB) paused its policy tightening cycle.
Meanwhile, the pound was plagued throughout the second part of October by weak UK economic data. Contracting sales and a cooling labour market dented Bank of England (BoE) rate hike bets.
What do you need to look out for?
Looking ahead, the first few days of November bring the BoE’s and Fed’s monetary policy decisions. Expect to see both GBP and USD fall if the central banks indicate that interest rates have peaked.
Eurozone third-quarter GDP is due out on Tuesday. Any signs that the bloc’s economy remains weak could put pressure on the single currency. The following week, the UK publishes its own GDP figures for Q3. A forecast contraction in the UK economy could see Sterling tumble.
Meanwhile, the ongoing conflict in the Middle East could drive volatility in the currency markets if developments continue to impact risk appetite.
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