4th October - Weekly FX Update

GBP/EUR: Monday 9:00 UTC 4th October: 1.16753

The GBP/EUR exchange rate lost considerable ground last week, but managed to recover heading in to the weekend. From 1.17253 on Monday, the rate dropped to a low of 1.15535. This was largely due to fears over a fuel crisis, as wholesale prices hit a record high and petrol stations across the UK ran dry. UK Q2 GDP spurred a recovery later in the week, as results showed a better than expected performance, with the economy now only 3.3% lower than pre-virus highs. In Europe, German unemployment figures improved slightly, but inflation hit a thirty-year high at 4.1%. The GBP/EUR is back trading above the 1.1650 level once more, and pressing 1.17 ahead of a quiet week for UK and EU data.

GBP/USD: Monday 9:00 UTC 4th October: 1.35588

GBP/USD is trading above 1.3550, which is up from last weeks lows of 1.34139. Similar to the GBP/EUR exchange rate, the GBP/USD took a big hit last week as fears grew over a potential fuel crisis in the UK. GBP/USD fell more than 2% from Monday to Wednesday. The rate attempted to recover heading in to the weekend as UK GDP came in better than expected, but the Pound did not regain as much ground as it did against the Euro. Nonfarm Payrolls will be the main event of this week, and strong figures will support the USD. As a result, in the short term it seems there may be movement to head slightly lower for GBP/USD, but both monthly and quarterly forecasts look a little more positive for the Pound.

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