Excel Currencies Blog

Finally some respite for the Pound after a tough 5-week period, but a move lower still almost guaranteed..

The USD has had a poor start to the week and has lost ground against all major currencies. Several Fed officials have signaled in the build up to the Fed interest rate decision this evening, that they may not need to tighten as much as initially thought. 

Inflation and interest rates remain the main drivers in the market and both are being delivered by the US in the next 36-hours, hence the recent volatility. There is currently a 30% chance of a rate hike in December in the US, but that figure will move tomorrow, depending on the latest inflation reading. 

The USD has also been devalued this week after the world's second biggest economy, China, were said to be considering new stimulus measures to shore up its wounded economy. The Chinese economy looks to be stabilizing and this means investors will flock from the safe-haven Dollar and into more riskier assets/currencies. 

Elsewhere, ING are the latest investment bank to downgrade its £-€ forecast. High UK mortgage rates and a slow growth economy, are expected to see the pair fall to 1.11 mid-market early 2024 say the bank. A notable drop from the current 1.15 mid-market, but the world's second biggest investment bank, Goldman Sachs, are expecting much worse in the same time-frame to 1.09.