GBP: The Pound strengthened slightly as the Bank of England (BoE) is expected to keep interest rates unchanged in today’s meeting, given that UK inflation remains above the central bank’s 2% target. Investors now anticipate the BoE to hold off on a second rate cut until November. However, if the BoE unexpectedly announces a rate cut, it could put downward pressure on the Pound.

EUR: Meanwhile, the Euro faced some weakness after the release of the Eurozone’s inflation data. Finalised figures for August confirmed inflation dropped to a three-year low of 2.2%, down from 2.6%. This has bolstered expectations of additional easing measures from the European Central Bank (ECB). Comments from ECB policymaker François Villeroy de Galhau also suggested that further monetary policy easing might be on the horizon.

USD: The U.S. Dollar lost some strength last night after the Federal Reserve cut its benchmark interest rate by 50 basis points, meeting the upper end of market expectations. Fed Chair Jerome Powell noted that the risks of higher inflation and labour market weakness are now balanced, and suggested more rate cuts are likely as confidence grows that inflation will continue to decline.