Markets tread cautiously with long sought after data and fiscal uncertainty on the horizon. With the US government finally reopening, traders brace for a deluge of data that could redefine the Fed’s path. In the UK, mixed signals from the Treasury leave sterling on shakier ground ahead of next week’s Budget. And in Japan, a tariff-driven contraction adds to policy pressures and yen volatility, keeping investors firmly in risk-aware mode.
Current rates
| Currency pair | Rate |
|---|---|
| eur usd | 1.1597 |
| gbp eur | 1.1349 |
| gbp usd | 1.3163 |
Rates correct as of 11:20am on Monday 17 November but may now have changed.
The Big 3
Three stories covering the latest developments in economies, currencies and borders.
Pound underperforms on income tax revelation
Sterling slid on Friday after reports that Chancellor Rachel Reeves had abandoned plans to raise headline income-tax rates, a move that sparked concerns over the UK’s fiscal trajectory and sent gilt yields sharply higher. Confusion over shifting briefings only added to market nerves, though the pound later steadied on suggestions that stronger growth forecasts drove the rethink. With inflation data due this week and the Budget not far away, sentiment toward the UK remains fragile, and expectations for further BoE cuts continue to build.
Dollar steady as markets brace for long-delayed US data
The dollar drifted lower last week as investors prepared for a wave of US data now that the shutdown has finally lifted. With the Fed’s recent cuts already priced in, attention turns to whether the incoming figures confirm the negative picture from private data sources, or whether there’s some good news after weeks in the dark. The lack of official data has muddied the picture, leaving policymakers wary and keeping December’s rate decision wide open. There’s also a risk that some data is missing altogether. GBP/USD pushed back above 1.31 ahead of this week’s FOMC minutes but with neither the pound or euro performing strongly, USD has been supported by hawkish remarks from Fed officials.
[Reuters]
Japan contracts as tariffs bite and yen volatility rises
Japan’s economy shrank for the first time in six quarters, hit by a sharp drop in exports (especially autos) following US tariffs. While officials framed the decline as driven by one-off factors, underlying momentum remains weak, weighing on bonds and adding pressure ahead of Tokyo’s upcoming stimulus package. The yen continues to face volatility amid fiscal concerns, debate over possible intervention, and a deepening diplomatic rift with Beijing that has already dented travel-related stocks.
[Reuters]
Looking forward
- Monday: Canada CPI. Japan reports GDP.
- Tuesday: Australia RBA minutes.
- Wednesday: FOMC minutes. UK reports CPI.
- Thursday: US will publish delayed Sept. jobs data. Japan inflation rate.
- Friday: US consumer sentiment. Flash PMIs published for Asia, Europe and the US. UK retail sales 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:
- USD pressure and fiscal dynamics now that shutdown risk is gone.
- UK Budget next week.
- Major pairs near key levels. USD looks stretched, while GBP and EUR could react to upcoming events.
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.