The Pound Under Pressure! This week, markets have been driven by a mix of economic signals and political developments. Uncertainty remains high, and global events are adding to the pressure on currencies.
Key Insights:
Pound Weakens
- Fed minutes highlight cautious stance on rate reductions
- GBP/USD drifts closer to September’s lows
Market Recap:
The US dollar advanced again on Wednesday, with little fresh news out of Europe to shift sentiment. Ongoing political developments have kept pressure on both the euro and yen, while sterling has strengthened against the euro, climbing back to levels last seen in mid-September. The release of the Fed minutes highlighted a cautious tone, as policymakers signalled concerns that cutting rates too soon could risk reigniting inflation.
Today's Market Watch:
The US dollar opened softer this morning following news that Israel and Hamas had reached an agreement on the release of hostages in Gaza. However, those early losses have since been reversed, with the dollar now trading higher on the day.
Sterling came under sharp pressure after the Institute of Directors reported that UK business confidence has fallen to a record low, citing higher costs and rising taxes. As a result, GBP/EUR has given back around half of this week’s gains, while GBP/USD has slipped back to September’s lows. Political developments in Europe may also be adding to the move, with President Macron expected to announce a new French Prime Minister by Friday evening.
Meanwhile, the usual weekly jobless claims report will be absent due to the US government shutdown. In its place, markets are likely to focus on commentary from Federal Reserve officials for direction.
9th October 2025
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