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The pound fell against the euro but both gave way to the US dollar yesterday.
The pound fell further against its closest rivals on Wednesday, as a Bank of England policymaker suggested the Bank would indeed cut interest rates at its November meeting.
GBP/EUR shed around half a cent yesterday before the pound dropped near its lowest in two months against the US dollar. The euro did not escape the day unscathed, as EUR/USD also fell to its lowest in nearly three months.
The Bank’s Megan Greene was speaking on the sidelines of the IMF/World Bank conference in Washington DC, yet her words had an outsized impact on the pound. “I think it’s most likely that monetary policy must continue to bear down to bring inflation to target”, Greene observed, sparking a sterling sell-off.
European Central Bank (ECB) president Christine Lagarde also featured on a busy day for central bankers. In remarks that seemingly had a much smaller impact on the euro, Lagarde pushed back on the idea that the ECB was committed to faster rate easing, stressing the need to continuously look at the data as it comes in.
The Bank of Canada eased interest rates in a bumper 0.5% cut on Wednesday. The decision was broadly expected and followed headline consumer price inflation (CPI) falling to 1.6% in September. The Canadian dollar has lost 2.5% to the US dollar in the space of just one month.
Existing home sales in the USA fell to their lowest level since October 2010 last month. Sales declined in all regions except for the West, however the study noted that “factors usually associated with higher home sales are developing.”
As if they didn’t have enough to deal with ahead of the autumn budget, Labour sources yesterday sought to contain a growing row with Donald Trump over election interference. Trump claimed that party officials had been lobbying for a Kamala Harris victory in the upcoming election, a claim Labour denied.
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GBP: Pressure builds
The pound is facing mounting pressure ahead of next week’s autumn budget and the next Bank of England rate decision. It’s little wonder that weakness is translating into multi-week lows but is that weakness here to stay or a flash in the pan?
GBP/USD: the past year
EUR: A mixed bag
The euro was something of a mixed bag yesterday, falling against the US dollar but gaining ground over the pound. That came despite some comments from Christine Lagarde that may usually have stemmed any significant losses.
GBP/EUR: the past year
USD: Marching on
The US dollar posted another positive day against its competitors yesterday and even climbed against fringe rivals like the Japanese yen. With 12 days to go until the election, the US dollar has some way to go before it is out of the woods.
EUR/USD: the past year
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