It’s all to play for this week. The US and China are on the verge of a truce and the ECB brace for a crucial health check on the Eurozone economy. Key storylines in the US tariff saga have reached a climax. There’s also some interesting news concerning something of a clean slate for South Africa and Nigeria, as far as money transfers in and out of the country are concerned.
And catch some key insights from our team below.
Current rates
| Currency pair | Rate |
|---|---|
| eur usd | 1.1641 |
| gbp eur | 1.1463 |
| gbp usd | 1.3344 |
Rates correct as of 10:40am on Monday 27 October but may now have changed.
The Big 3
Three stories covering the latest developments in economies, currencies and borders.
Fed decision looms whilst US China trade talks underway
Markets opened the week on firmer footing as signs of progress in US – China trade talks eased tensions. President Trump is in Asia this week, meeting leaders in Japan and China, where negotiators have reportedly reached consensus on key issues including export controls and shipping levies. 100% tariffs are apparently “off the table.” The prospect of a deal buoyed risk-sensitive currencies, while havens such as the yen and franc edged lower. This is all happening in the same week that the Fed is widely expected to trim rates by 25bps, following softer US inflation data. The dollar remains steady ahead of both events, holding firm against peers.
[Reuters]
Eurozone braces for health check ahead of data releases
Fresh inflation data is set to test the region’s resilience this week as the ECB reveal the outcome of their monetary policy decision. Economists expect the ECB to keep rates unchanged, while October’s inflation reading is seen easing to 2.1%. With manufacturing still weak, particularly in Germany, and growth subdued following US tariffs, policymakers remain cautious. The euro, up 12% this year, has recently softened as traders weigh slower momentum against the ECB’s view that prices are now broadly at target.
South Africa and Nigeria exit ‘dirty-money’ list
Paris based Financial Action Task Force have removed South Africa and Nigeria from their “gray list” of jurisdictions subject to increased monitoring. This comes after both countries have stepped up measures to combat money laundering and terror financing. The move, which also removes Mozambique and Burkina Faso, is expected to boost investor confidence and reduce transaction costs for remittances to those countries. The rand strengthened 0.4% to 17.27 per dollar and 10-year bond yields fell to 8.9%, reflecting improved sentiment. For Nigeria, the decision could unlock greater foreign investment and ease remittance flows, a key source of its $20bn annual inflows.
Looking forward
- Monday: Trump in Japan. Durable goods orders USD.
- Tuesday: The APEC CEO summit begins in South Korea. Euro GfK Consumer Confidence.
- Wednesday: The Fed and the Bank of Canada interest rate decisions.
- Thursday: Trump expected to meet Xi Jinping at APEC summit. ECB expected to keep rates unchanged. Eurozone growth and interest rate data.
- Friday: Euro area reports CPI. US income and spending data.
Here’s what we’re talking to our clients about
We’re always here to support. Here are some of the conversations we’re having:
- Managing risk and reducing currency exposure ahead of UK Budget.
- The FED rate decision on Wednesday
- ECB rate decision on Thursday and ECB President Lagarde’s comments
The contents of this article do not constitute financial advice and are provided for general information purposes only. While the content is based on information believed to be accurate at the time of publication, no guarantee is provided