The pound remains under pressure amid ongoing budget uncertainty, while central banks take the spotlight. From the RBA’s hawkish tone to expected rate cuts from the BoC and Fed, here’s what’s moving global currency markets today 📉💱
Key Insights:
- The pound weakens amid continued budget-related uncertainty.
Market Recap:
The pound was the weakest performer among G10 currencies after the Office for Budget Responsibility lowered its UK productivity outlook. This reinforced expectations of potential Bank of England rate cuts and drove 10-year gilt yields toward their lowest levels of the year. Sterling saw notable losses, with GBP/EUR touching a two-year low and GBP/CHF hitting record lows.
In the US, the dollar briefly strengthened through the afternoon before pulling back slightly ahead of the Federal Reserve’s policy announcement, where markets are fully anticipating a 25bp rate cut.
Meanwhile, the yen gained support following verbal intervention from Japanese officials, while overall risk sentiment remained steady amid a quiet session and limited US data releases.
Today's Market Watch:
The Australian dollar strengthened this morning after inflation came in above expectations, leading investors to scale back expectations for RBA rate cuts over the next year. The move was reinforced by Governor Michelle Bullock’s recent hawkish tone, which supported the AUD’s momentum.
Later today, the Bank of Canada is widely anticipated to lower rates by 25bps, following dovish signals from Governor Macklem and renewed trade tensions with the US. Despite firmer employment and inflation figures, policymakers are likely to suggest a pause in easing, hinting at a cautious stance but maintaining an overall dovish bias.
Looking ahead to the US session, the Federal Reserve is expected to deliver a 25bp rate cut and end quantitative tightening. With no updated economic projections due, Powell’s press conference will be key — he’s likely to describe the move as a precautionary adjustment and avoid giving firm guidance on future policy moves.
Meanwhile, the British pound remains under pressure, extending its recent losses as lingering budget uncertainty continues to weigh on sentiment.
29th October 2025
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