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16th October

Top Currency Pairs Monday 16th October 04:00 UTC GBP/USD: 1.21555 (Last Week: 1.21992) EUR/USD: 1.05238 (Last Week: 1.05523) GBP/EUR: 1.15504 (Last Week: 1.15602) Market News

Pound Sterling The British Pound rose slightly this morning but continues to face challenges as a predominantly risk sensitive currency amid the rising geopolitical tension in the Middle East. Looking forward, Chief Economist Huw Pill will speak later today and his forward guidance on the UK economy, inflation, and monetary policy will garner investor interest. Moreover, the release of UK labour market, inflation and retail sales data due later in the week could attract considerable attention.

Euro The Euro has been trading in a directionless manner recently as a number of ECB members indicated that the time to pause the rate hiking cycle had come. Furthermore, some stated that it would be prudent to await fresh data early in 2024 before making any further adjustments to rates. Ultimately, the pause on rates denies the Euro support from the interest rate channel, particularly against the likes of the Dollar and Pound whose central banks could yet hike interest rates again in 2023.

U.S. Dollar The US Dollar has struggled to capitalize on its post US CPI gains registered at the end of last week, retracing part of the move, and oscillating in a tight range. However, further downside seems cushioned following increased expectations that the Federal Reserve will keep interest rates higher for longer. That said, the recent dovish remarks by several Fed officials suggested that the US central bank is poised to leave interest rates unchanged for the second consecutive month in November.

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