USD managed to claw out a gain on Friday, reversing some earlier session losses, but still suffered its worst week since early August. US-China trade tensions eased on Friday after Trump remarked “I think we’ll be fine with China”.
*Daily move - against G10 rates as of 06:00 BST, 20.10.25
** Indicative rates - interbank rates as of 06:00 BST, 20.10.25
UK inflation data could make the case against further Bank of England rate cuts and provide support for the pound, with markets expecting headline CPI to rise to 4% year-on-year in October from 3.8% previously. Public sector net borrowing will also be closely watched on Tuesday after August’s figure exceeded £20 billion.
On Friday flash PMI data from the UK and EUR which will be closely watched for activity in October.
Markets will remain alert to US-China trade developments and any fresh signals of stress in the US regional banking sector. We also get the release of the delayed CPI numbers for September. Markets of late have been adding to rate cut bets despite numerous Fed members highlighting inflationary pressures persisting in the economy.
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