News & Analysis

It has been another rocky week for FX markets this week. The circus remained in full swing in Westminster with newly minted UK Chancellor Jeremy Hunt reversing what was left of Kwarteng’s mini-budget and PM Liz Truss finally standing down as Prime Minister after pledging just 24 hours prior to MPs that she is a “fighter, not a quitter”. Outside of the UK’s political soap opera, it has been another week all about the dollar, despite the fact that the US data calendar was notably light. Instead, it was lesser-known FOMC members that struck hawkish tones in their external communications that prompted another bid in the US 10-year, which in turn weighed on equities and boosted the dollar. Next week, real rates will remain in focus along as fresh policy decisions are expected from the Bank of Canada, European Central Bank, Central Bank of Brazil, and Bank of Japan. Growth conditions will also be top of mind as markets await the delayed publication of China’s Q3 GDP data, while flash PMIs from major nations for October are also released.

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Authors: 
Simon Harvey, Head of FX Analysis
Jay Zhao-Murray, FX Market Analyst
María Marcos, FX Market Analyst

 

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