Gentium FX | Daily Report - 27th October 2023 - ECB Keep Interest Rates Unchanged

GBP: The British Pound is making a determined effort to protect the fragile support levels it has established against both the Euro and Dollar in anticipation of the crucial Bank of England interest rate decision next week. However, it's unlikely that we'll see a strong rally before the BoE's decision, which may result in some pressure for the Pound in the meantime.

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EUR: As anticipated, the European Central Bank (ECB) kept interest rate levels policy unchanged yesterday with a unanimous decision. This marks the first time they haven't made changes since mid-2022. Furthermore, ECB President Christine Lagarde and the governing council reiterated their belief that inflation is still high and that interest rates will remain elevated for as long as needed. Market analysts currently see the 4% deposit rate as the final rate, at least for the time being, as inflation slows down and the Eurozone economy heads toward a recession.

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USD: The U.S. Dollar is on still track for a weekly gain this morning, thanks to robust U.S. growth figures that support the case for maintaining higher interest rates for an extended period. In fact, data from yesterday revealed that the U.S. economy experienced its fastest growth in nearly two years during the third quarter, driven by higher wages resulting from a tight labour market.

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