• The ECB signals the end of its rate cutting cycle
The EUR benefitted from yesterday's ECB meeting, with Christine Lagarde commenting the disinflationary process is over. Markets eased back future rate cut bets, pricing in the notion that the ECB’s rate cutting cycle is over.
USD was weaker on the day, after the initial jobless claims number came in higher than expected, firming up expectation of three rate cuts by the Fed this year - 73bp now priced-in by year's end. CPI numbers that came out at the same time were all pretty much in line with expectations, with only the MoM number coming in higher. But USD weakness was once again limited with GBPUSD and EURUSD still bounded by prior resistance levels.
GBP enjoyed a late surge following the move on equity markets which continued to rally higher.
*Daily move - against G10 rates at 7:00 am, 12.09.25
** Indicative rates - interbank rates at 7:00 am, 12.09.25
GDP in July in the UK came in at 0% as widely expected, indicating the economy stagnated, marking a tepid start to the third quarter of this year amidst tariff headwinds and the potential for tax rises in the upcoming budget. As a result, GBP moves are muted, ahead of key jobs and inflation data as well as the Bank of England meeting next week.
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