All eyes today are purely on The European Central Bank’s meeting in Frankfurt as they release their next interest rate decision. Up until June of this year, the ECB had halved its key rate to 2% – 2.15% but has crucially been unchanged since.
The reluctance to change interest rates since June has been largely down to the uncertainty surrounding Donald Trump’s 15% tariffs on European Union imports, along with low growth in Europe and now the developing political uncertainty in Europe’s second largest economy, France. All of the aforementioned now keeps a strong possibility of the European Central Bank being open to the prospect of further interest rate cuts.
Later this afternoon, we turn our attention to U.S Inflation data which will be a key release ahead of next week’s interest rate decision. Headline inflation is expected to have risen 2.9% in August, which would represent the fastest growth since January. Whilst Core Inflation is expected to have remained steady at 3.1%. A quarter-point rate cut by The Federal Reserve is fully priced in next week, however with the recent Non-Farm Payroll revisions, a lower growth figure would bring forward the possibility of a more aggressive interest rate cut of 50 basis-points.
GBP/EUR 1.1547 GBP/USD 1.3506 GBP/AED 4.9629
GBP/AUD 2.0444 GBP/CHF 1.0796 GBP/CAD 1.8751
GBP/NZD 2.2793 EUR/USD 1.1683 GBP/ZAR 23.6957