Currency news

Autumn Budget in focus

Head of FX Analysis at Equals Money
-
3
min read
Publish date
October 30, 2024
  • Big day ahead for EUR and USD with GDP releases
  • GBP to dodge budget bullet?


Yesterday's currency recap

USD lost ground yesterday, after JOLTS job openings plummeted to their lowest point since early 2021.

In the meantime, GBP advanced ahead of the release of the Autumn Budget, with still very little risk premium priced in. This suggests the market is expecting a cautious budget, with limited impact.

Today's GBP rates

Currency pair Daily move* Indicative rate**
GBPAUD 0.64% 1.9830
GBPCAD 0.18% 1.8104
GBPCHF 0.64% 1.1297
GBPDKK 0.37% 8.9801
GBPEUR 0.37% 1.2036
GBPJPY 0.39% 199.6110
GBPNOK -0.07% 14.2572
GBPNZD 0.56% 2.1808
GBPSEK 0.28% 13.8543
GBPUSD 0.27% 1.3008


*Daily move - against
G10 rates at 7:30am, 30.10.24

** Indicative rates - interbank rates at 7:30am, 30.10.24

Key data points

Currency Event Period Consensus Previous
EUR GDP QoQ Q3 0.20% 0.20%
EUR GDP YoY Q3 0.80% 0.60%
EUR German CPI MoM Oct 0.20% 0.00%
EUR German CPI YoY Oct 1.80% 1.60%
GBP Autumn Budget
USD GDP QoQ Q3 2.90% 3.00%
USD ADP Employment Change Oct 111,000 143,000
USD Core PCE QoQ Q3 2.10% 2.80%

What we think

It's shaping up to be a busy day ahead with Q3 GDP figures out from the US and Europe, as well as German CPI numbers and ADP payrolls stateside. On the GDP numbers, recent sentiment has been for Europe's growth outlook to be pretty disappointing reflecting the recent weakness in the EUR. So, any numbers above expectations will likely cause the currency to bounce back.

In contrast, over in the US recent comments and data have supported the idea that the US economy is faring well and this has had a positive impact on USD gains this month. Should today's figures fall below expectations, we might witness investors seizing the opportunity to lock in profits from recent USD gains ahead of Friday's job numbers.

Today at lunch time we have the long anticipated release of the Autumn Budget. Like we mentioned earlier this week, should the budget deliver pro-growth policies GBP could rally. On the other hand, if policies don't inspire confidence in the market GBP could take a serious hit. However, talking to market participants, it seems many are expecting Rachel Reeves to tread carefully in her budget and thus market impact could well be limited.

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