The Weekly Market Update
News & Insights
w/c 20th October: Growing Expectations
GBP
The British Pound found limited support after UK GDP grew by 0.1% in August, narrowly beating forecasts. While not a strong result, it avoided contraction and gave sterling a modest lift. However, analysts note that this growth is largely driven by government spending rather than private sector activity. Flat services output and weak consumer demand suggest the economy remains fragile, limiting the Pound’s ability to gain further strength.
EUR
The Euro gained slightly as political uncertainty in France eased, with Prime Minister Sebastien Lecornu surviving key no-confidence votes. This reduced regional instability, allowing the currency to stabilize. Support also came from optimism around peace talks between the U.S. and Russia. However, the Eurozone’s mixed economic performance, particularly in industrial output and inflation trends, continues to cap the Euro’s potential for stronger appreciation in the near term.
USD
The U.S. Dollar continued to weaken amid growing expectations of further interest rate cuts by the Federal Reserve. Moreover, concerns about regional bank vulnerabilities and an ongoing government shutdown have amplified market uncertainty. Recent economic data has been underwhelming, reinforcing the view that U.S. growth is slowing. Ultimately, with persistent policy and fiscal concerns, confidence in the Dollar has eroded, and the currency remains under sustained pressure across global exchange markets.
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