Spectrum Daily Report

GBP: The British Pound has been losing momentum as recent data showed British inflation fell more than expected in September, paving the way for a rate cut next month. In fact, the UK’s inflation rate fell to 1.7% on an annual basis. This was the first time it had fallen below the BoE’s 2% target since April 2021.

EUR: The Euro was relatively flat this morning as investors await the outcome of today’s ECB meeting. The central bank is expected to cut interest rates by another quarter-point to 3.25% as recent data showed that the rapid retreat in inflation is being accompanied by a deteriorating economy. Investors will take more cues from the press conference after the interest rate decision. Any dovish comments from Christine Lagarde could exert some selling pressure on the bloc’s single currency.

USD: The U.S. Dollar edged higher yesterday after recent data indicating a resilient economy coupled with slightly higher than expected inflation have led market participants to trim bets for an aggressive U.S. rate reduction. Ultimately, market participants see two more cuts this year, totaling 50-basis points, and investors currently lay 92% odds for a 25-basis point cut when the Fed next decides policy on Nov. 7th.

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