The EUR was the biggest loser yesterday, with the EUR index and EURUSD not being able to push through previous resistance levels. The ECB president spoke in the afternoon, suggesting that the single-bloc should see further weakening of inflation, but as ever attempted to caveat the comment suggesting that the ECB still has a lot to do to bring inflation down. Risk sentiment was broadly lower, causing a recovering on USD. GBP had a solid day with the GBP index finishing higher as well, back up to two-month highs.
Later in the evening, the Fed minutes failed to deliver anything market moving, with policy makers reiterating their cautious stance on interest rates.
* Daily move - against G10 rates at 7:30am, 22.11.23
** Indicative rates - interbank rates at 7:30am, 22.11.23
Going into the Thanksgiving holiday we expect markets to remain relatively quiet, thus we would expect the themes from this week to continue, which is consolidation around key resistance levels on GBPUSD and EURUSD. The Autumn Statement will take the headlines today in the UK press, and anything to suggest that fiscal policy could be loosening (in the form of tax cuts that do not have a negative impact on the UK five-year debt trajectory) could add some support for GBP, but subject to any shock announcements GBP moves will likely be muted from the statement.
Everyone loves a forecast, and the beauty of the markets is that everyone has an opinion - it's evident to see that over the last few years there is a wide disagreement as to where analysts expected GBPUSD to be by the end of this year. Even at this stage, there is a difference of 13 cents between the high and low.
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