Spectrum FX Weekly Report

GBP: After being the top performing G10 currency at the start of summer, Sterling unwound most of its gains by the end of it. As market participants expect the BoE to maintain its monetary policy in the next meeting, this exerted pressure on the British Pound. In fact, Sterling slid nearly 4% against the dollar in the third quarter. Looking forward, in the absence of economic data released from the UK docket this week, GBP pairs remain at the mercy of global market sentiment.

EUR: The Euro has been consolidating its recent losses as signs of the beginning of the end of the high inflation in the Eurozone have been fuelling bets that additional ECB rate hikes may be off the table for now. This, along with speculations about a possible contraction in GDP during the second half of the year have acted as a headwind for the bloc’s single currency.

USD: The U.S. Dollar Index held its ground and stood not too far from its recent 10-month high, last seen trading at 106.27. This follows its best quarterly performance in a year last month thanks to persistently hawkish Federal Reserve rhetoric. Looking forward, market players will take cues from Jerome Powell's speech later in the session. Further hawkish comments could boost the US Dollar and act as a tailwind for the greenback.

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