Daily FX Report – Calm Before The Storm?

GBP: The British Pound remained steady this morning after the early release of UK economic data. Positive monthly factory orders and projected GDP growth have boosted the outlook for the UK economy. Financial markets anticipate that the Bank of England (BoE) will lower interest rates just once during the two remaining policy meetings this year.

EUR: Meanwhile, the Euro strengthened this morning after German inflation data revealed a 1.8% rise in consumer prices. This inflation supports the Euro, while investors consider the European Central Bank’s (ECB) cautious stance on economic growth. Currently, markets are expecting two rate cuts in October and December.

USD: The U.S. Dollar dropped by over 1% during Asian trading, pulling back from a one-month high reached the previous night. Although the Dollar initially gained strength following an unexpectedly high inflation report for September, it lost momentum after labor data revealed a larger-than-expected rise in weekly jobless claims. This sign of weakness in the labor market could prompt the Federal Reserve to lower interest rates steadily in the medium term, despite inflation staying relatively high.