USD holds steady as traders await Friday’s delayed US inflation print – the key data ahead of next week’s Fed meeting. Markets are fully pricing-in another 25bp cut, though traders note CPI risk is skewed to the upside.
GBP lagged after UK inflation unexpectedly held at 3.8%, fuelling bets on a BoE rate cut before year-end.
Read more about the Bank of England and Monetary Policy Committee's interest rate decisions here:
*Daily move - against G10 rates as of 06:00 BST, 23.10.25
** Indicative rates - interbank rates as of 06:00 BST, 23.10.25
USD remains well-supported into Friday’s CPI print, with the market leaning towards a “buy the dip” bias, given positioning and the risk of stronger inflation.
GBP looks susceptible to selling pressure, given weak UK fundamentals and cemented rate-cut expectations caused by a weaker inflation outcome – a clear contrast to a still-resilient US backdrop. Next up for the UK and GBP is Friday's retail sales and PMI numbers. This will help markets gauge how the economy is doing. A weak set of numbers will likely lead to markets putting a higher probability on a rate cut this year.
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