Key Headline:

"Trump trades" are reversing as the election approaches, with a busy week ahead for central banks, including updates from the Federal Reserve, Bank of England, and Reserve Bank of Australia.

Recap

On Friday, the gilt market steadied, suggesting some stability had returned after the turbulence caused by the Autumn Budget release. The British pound regained some ground ahead of the upcoming Bank of England meeting on Thursday. Meanwhile, the US dollar initially weakened following a disappointing non-farm payroll report, which showed only 12,000 new jobs in October due to the aftermath of recent hurricanes. However, a surprising increase in hourly earnings gave the USD a strong boost across major currencies, except for the GBP.

Today’s Rates

Today's Interbank Rates at 09:48 am against GBP movement.

GBP>EUR – 1.1897

GBP>USD – 1.2966

EUR>GBP – 0.8403

EUR>USD – 1.0897

GBP>CAD – 1.8044

GBP>AUD – 1.9674

GBP>SEK – 13.833

GBP>AED – 4.7623

GBP>HKD – 10.082

GBP>ZAR – 22.727

GBP>CHF – 1.1199

GBP>PLN – 5.1653
 

Today’s Overview

This week brings major events, with the U.S. presidential election and rate announcements from Australia, the UK, and the U.S. In October, the U.S. dollar strengthened as markets anticipated a Trump win.

Both the Federal Reserve and the Bank of England are expected to reduce rates by 25 basis points, but future policy guidance will be crucial for currency trends. It remains to be seen whether the BoE will shift its approach following the Autumn Budget or keep its focus on domestic data.

The Reserve Bank of Australia, however, is not likely to cut rates. At the start of the week, the USD is showing softness as traders pull back from "Trump trades" after an Iowa poll revealed Harris leading with 47% to Trump’s 44%. While the dollar has been strong with expectations of a Trump win, a Harris victory could prompt a rapid USD sell-off, likely leading to a weaker dollar, with sustained gains likely only if Republicans secure full control.‍

4^th November 2024

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