Daily currency update
The US Federal Reserve cut interest rates last night, lowering the cost of borrowing from 4% to 3.75%. The Federal Open Market Committee voted 7–3 in favour of the move, though divisions remain over whether policymakers should prioritise price stability or maximum employment. Stephen Miran supported a larger 0.5% cut, while Austan Goolsbee and Jeffrey Schmid voted for no change.
Markets interpreted the statement and Chair Jay Powell’s comments as slightly more dovish, suggesting a bias toward further cuts. The dollar weakened in response, with GBP/USD rising to 1.3390 before easing back, and EUR/USD touching 1.17 for the first time since October.
Key movers
With the Fed done for the year, attention can now turn to other events starting with tomorrow morning’s UK growth data for October. The economy is predicted to have expanded 0.1% compared to the previous month and as usual any deviation will likely move the pounds value. Looking further ahead next week brings a deluge of delayed US data on the back of the government shutdown. It also brings interest rate decisions from the European Central Bank and the Bank of England who are expected to hold and cut respectively.
Expected Ranges
GBP/USD: 1.3300 – 1.3460 ↑
GBP/EUR: 1.1380 – 1.1470 ↓
EUR/USD: 1.640 – 1.1750 ↑
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