The Weekly Market Update
News & Insights
w/c 29th September: Reassessments
GBP
The British Pound is under pressure amid rising UK fiscal risks and political uncertainty. In fact, market concerns are growing over Chancellor Rachel Reeves’ resistance to calls for increased public spending. Moreover, investors fear potential breaches of fiscal rules, pushing GBP/EUR lower. Ultimately, with weakening momentum, soft economic sentiment, and diverging central bank policies, analysts expect the Pound to remain vulnerable ahead of November’s budget.
EUR
The Euro holds steady ahead of key national inflation data from Germany, France, and Italy, which will shape expectations for the Eurozone-wide release. Forecasts suggest headline inflation will rise to 2.3% and core to 2.4%, reinforcing the European Central Bank’s cautious stance on interest rates. If data exceeds expectations, the Euro could strengthen further, supporting its position against other currencies.
USD
The U.S. Dollar climbed to multi-week highs following Friday’s stronger than expected economic data, including a revised 3.8% GDP growth rate and falling jobless claims. These figures have led markets to scale back expectations for aggressive Federal Reserve rate cuts. While the rally may be stretched, attention now turns to the upcoming PCE inflation data, which could influence the Fed’s next steps and determine whether Dollar strength continues.
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