Another quiet day across the currency complex as markets await tomorrow’s key US Retail Sales data, and the European Central Bank's (ECB's) interest rate meeting. Following a slew of weak EU macro-economic data, markets are now fully pricing in a 0.25% interest rate cut by the ECB.
Sterling was largely unmoved after the latest UK employment report showed job vacancies falling and wage growth rising at its slowest pace in over 2 years.
Ahead of the UK Budget, senior Labour party members are expressing concerns as Chancellor Rachel Reeves considers raising £40b through tax hikes and spending cuts.
The GBP has slipped to its lowest level in two months against the USD, as today's UK inflation report unveiled a sharper-than-anticipated decline, marking the lowest figures since April 2021. Headline inflation came in at 1.7% versus expectations of 1.9%, with services inflation dropping from 5.9% to 5.6%.
*Daily move - against G10 rates at 7:30am, 16.10.24
** Indicative rates - interbank rates at 7:30am, 16.10.24
With the US election looming, the latest polls continue to show Harris and Trump neck and neck in the race to the White House. In a Bloomberg interview yesterday, Trump doubled down on his promise to impose tariffs on all imports into the US, stating “To me, the most beautiful word in the dictionary is ‘tariffs', it’s my favourite word.” Trump is proposing a minimum 10% blanket tariff on all imports, with tariffs as high as 60% on goods imported from China.
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