Pound Sterling (GBP)
The British Pound began Q4 on solid ground, buoyed by easing fiscal worries after the Labour Party refrained from announcing any radical economic policies at its recent conference. Increased foreign interest in UK equities, highlighted by the FTSE 100’s record levels, also supported Sterling. However, despite these initial gains, the Pound struggled to hold its peak, reflecting lingering investor caution and the need for stronger catalysts to confirm a lasting recovery.
Euro (EUR)
The Euro traded steadily after Eurozone inflation came in line with forecasts, climbing to 2.2% in September—the highest since April. The data bolstered expectations that the European Central Bank has likely completed its rate-cutting cycle. Attention now turns to comments from ECB President Christine Lagarde, which could further shape sentiment if they reinforce the end of policy easing. Overall, the Euro maintained a firm tone, underpinned by stabilising price growth and cautious optimism.
U.S. Dollar (USD)
The U.S. Dollar remained under pressure amid the ongoing government shutdown, political gridlock, and softer economic signals. The disruption has delayed crucial data releases, which limited the Federal Reserve’s visibility and raising the probability of a precautionary interest rate cut. Adding to the downside, ADP employment figures fell short of expectations, deepening bearish sentiment. With the shutdown dragging on, risks to business confidence and economic momentum are mounting, which could potentially leave the Dollar on the back foot in the near term.