Pound Sterling (GBP)
With little new UK economic data out today, attention is likely to turn to a British Retail Consortium report showing that food inflation eased to 3.7% in October from 4.2% a year earlier. Persistently high food prices had been a key concern for the Bank of England and one reason it has held off on cutting interest rates. The slowdown could therefore boost expectations of a rate cut at the BoE’s December meeting, where markets currently see a 35% chance of a 25-basis-point reduction. That meeting will come shortly after the late-November budget, which is also expected to weigh on the pound.
Euro (EUR)
Markets were calm, with modest gains in the euro helped by a softer dollar. Some sentiment boost may have come from signs of compromise on France’s budget, as lawmakers approved an amendment to raise an extra €2 billion from corporate taxes next year. While this is a small amount and could dampen growth, investors appear encouraged by progress toward a more balanced fiscal path. In the eurozone, attention is on ECB data releases covering inflation expectations and bank lending, though neither is expected to bring major surprises. Overall, market moves are likely to remain limited unless U.S. data provides a fresh catalyst.
U.S. Dollar (USD)
The dollar is modestly weaker at the start of the week. Overnight, USD/JPY slipped after Japanese Finance Ministry officials said they were closely watching the yen—seen as a mild verbal intervention—though such comments rarely trigger lasting moves. Markets are now looking ahead to Thursday’s Bank of Japan meeting, where no change is expected, but any hints at policy normalization could give the yen a mild boost. In the U.S., there’s been little fresh economic data, though reports of potential job cuts at Amazon highlight ongoing consumer worries. Today’s releases include the October Conference Board Consumer Confidence survey and August’s S&P Case-Shiller house price index, which has now fallen for five consecutive months. Soft readings could weigh on the dollar, though overall moves are likely to remain contained.