GBP: Downside risks – ING

FXStreet Insights Team FXStreet

EUR/GBP is trading back above 0.88 again after yesterday's release of surprisingly soft September unemployment data in the UK, ING's FX analyst Chris Turner notes.

Political noise could push EUR/GBP to new highs

"Even though there are widespread doubts about the quality of the Labour Force Survey data (this survey was briefly suspended in 2023 to reassess its quality), sterling has failed to reclaim its losses."

"A further negative today is news that PM Starmer could face a leadership challenge after the budget later this month. Even though Starmer's approval ratings are very poor, his removal would create some doubt about the future of Chancellor Rachel Reeves and add some risk premium to UK asset markets."

"GBP already has enough negative news from the tighter fiscal/looser monetary policy story to keep it weak. But political noise could push EUR/GBP to new highs for the year in the 0.8870/8900 area."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD dips below 1.3350 with bullish momentum losing steam

The British Pound ticks lower against the US Dollar Monday, attempting to close a seven-day rally, as tensions rise again in the Strait of Hormuz, one of the critical points in the peace process between Washington and Tehran. The GBP/USD pair trades near 1.3340 at the time of writing, down from 1.3387 highs last week, although it maintains a near-term bullish trend intact.

EUR/USD drops toward 1.1400 as US Dollar rebounds

EUR/USD pair trades marginally lower, heading toward 1.1400 in the European session on Monday. The pair faces slight selling pressure as the US Dollar gains ground after a negative weekly close. Middle East concerns and the USD/JPY rally support the Greenback.

Gold hangs near daily low amid Hormuz risks; receding Fed hike bets limit losses

Gold recovers slightly from the daily low, albeit it retains the negative bias, and remains below a two-week high touched earlier this Monday. The US Dollar attracts some safe-haven flows amid tensions over the Strait of Hormuz and undermines the bullion. However, receding US Federal Reserve rate hike bets might hold back USD bulls from placing aggressive bets.

Dogecoin recovery stalls amid early signs of whale support

Dogecoin (DOGE) price nears $0.0770, maintaining a broadly consolidative tone for the last three days after Friday’s 4% rebound. The first-ever meme coin is losing retail interest as DOGE derivatives volume drops, while on-chain data shows early signs that large-wallet investors, commonly referred to as whales, are expanding their holdings.

Week ahead – ISM services PMI and Fed Minutes to shake Fed hike bets

The US dollar is finishing the week on the back foot against most of its major counterparts this week, losing the most ground against the kiwi, the franc and the pound. Despite the pullback, investors remained adamant in their view that the Fed may have to press the rate hike button before the turn of the year.

Kevin Warsh offers no policy clues: Why markets still got their answer

Financial markets came to Sintra looking for clues about the Federal Reserve's (Fed) next move. They largely left with confirmation that Fed Chair Kevin Warsh intends to make those clues much harder to find.