After a turbulent week packed with central bank decisions, the days ahead look relatively calmer, but by no means without interest. The Federal Reserve delivered a 25bps cut as expected, while also signalling up to 50bps more easing before year-end. Markets interpreted this as the Fed preparing to get ahead of slower growth, and the U.S. Dollar actually strengthened around 2% on the back of the decision, a reminder that clear guidance can sometimes matter more than the cut itself.
Closer to home, the Bank of England held rates steady, though with a clear hint that a cut is on the table as early as next month. Sterling slipped in response, with GBPEUR drifting lower, highlighting how diverging monetary paths between the U.S. and UK are driving currency flows.
What’s Ahead This Week
While the calendar looks quieter compared to last week, a few releases are worth monitoring:
- Monday – Eurozone consumer confidence, expected at -15, remains firmly negative. This highlights the drag on sentiment across the bloc despite improving inflation trends, and may weigh modestly on the Euro.
- Tuesday – The Riksbank is expected to leave rates unchanged, with focus shifting to guidance on the timing of future cuts. Flash PMI data is also due: Europe’s figures look steady, but the UK’s are expected softer, which could reinforce the view that the UK economy is slowing into Q4.
- Thursday – A busier day. The Swiss National Bank decision should see no change, but markets will watch for hints on further easing later in the year. Across the Atlantic, the U.S. releases GDP numbers (likely unrevised at 3.3%) alongside jobless claims, which are expected to worsen. A weaker labour market would add weight to the Fed’s dovish outlook and could inject some short-term volatility into Dollar pairs.
Final Thoughts
While this week lacks the fireworks of last, the market remains highly sensitive to guidance on growth and inflation. With the Fed leaning dovish, the BoE edging toward cuts, and Eurozone sentiment stuck in negative territory, currencies may be more range-bound but still prone to swings on surprises.
For businesses and investors with exposure, this period of relative calm may be an opportunity to review strategies before the next wave of central bank moves and tariff headlines in the weeks ahead.
GBP/EUR 1.1455 GBP/USD 1.3481 GBP/AED 4.9538
GBP/AUD 2.0452 GBP/CHF 1.0710 GBP/CAD 1.8622
GBP/NZD 2.3021 EUR/USD 1.1751 GBP/ZAR 23.3156