France
14 October 2024
Weekly Market Headlines:
- Pound to euro rates could face greater attention this week as the FX market closely monitors the upcoming Eurozone interest rate decision. Currently, the exchange rate is less than one cent off 2.5-year highs and may face volatility, with the European Central Bank’s third interest rate decision of the year set to take centre stage. This decision could heavily influence euro exchange rates.
- In the UK, critical economic data may sway the Bank of England’s next move. Upcoming UK unemployment and inflation figures could set the tone for the central bank’s next interest rate decision, which in turn could impact the pound’s performance. Weaker data may raise the likelihood of a rate cut, potentially weakening the pound, while stronger data could prompt a more cautious approach from the Bank of England.
- Meanwhile, the US dollar continues to trade strongly just three weeks ahead of the US election. Since October 1st, the dollar has risen by 2.2% against the euro and 2.7% against the pound. With only 22 days until the election, the FX market may see increased activity.
Contact your account manager on +44 (0) 204 506 5672 to explore Lumon’s options for managing risk.
This week, the Eurozone is in focus with the European Central Bank’s (ECB) latest interest rate decision. The euro has weakened in 2024, partly due to ECB rate cuts in June and September. With a third cut likely, it remains to be seen whether this will further weaken the euro or lead to a rebound if markets consider it oversold.
Pound to euro rates are also under the microscope as UK unemployment and inflation data are released. If wage inflation slows, it could reinforce expectations for the Bank of England’s rate cut in early November, influencing the pound’s performance.
In the UK, the October budget is 16 days away, where the new Labour government’s fiscal plans could impact the pound.
In the US, upcoming retail sales data and the election in 22 days could bring volatility, with past elections showing over 4% movement in GBP to USD and EUR to USD rates.
It may be a good time to consult your account manager about these developments and future events like the US election and UK budget.
What events might move exchange rates this week?
GBP
- Tuesday: UK unemployment
- Wednesday: UK inflation
- Friday: UK retail sales
EUR
- Thursday: Eurozone interest rate decision & European Central Bank press conference
USD
- Thursday: US retail sales
