The pound and euro fell against the dollar on Thursday amid expectations of key economic data from the US. Investors are assessing the results of the Fed meeting and preparing for the release of GDP and inflation.
The pound sterling weakened slightly on Thursday in the foreign exchange market, as did the single European currency. The dollar stabilized after the Federal Reserve's decision to keep the key rate unchanged. Market participants are waiting for fresh figures on inflation and growth of the American economy.
As of 14:07 Moscow time, the pound lost 0.03 percent and traded at 1.3325 dollars. The euro fell 0.08 percent to 1.1149 dollars.
UK Finance Minister John Healy's budget left the deficit on a downward trajectory. The Office for Budget Responsibility forecasts a deficit of 3.4 percent of GDP by 2027 and provides for only moderate additional spending. ING economist James Smith noted that these parameters are unlikely to have a noticeable impact on the Bank of England's decisions.
According to Smith, the Bank of England may raise rates as early as next week and possibly in February. He also believes that the next general election in the UK is becoming more likely in 2027.
After the Fed meeting, the dollar weakened slightly, however, according to ING currency strategist Francesco Pesole, this movement has little chance of continuing. The regulator's message was called "hawkish" by the analyst: the Fed chair pointed to persistently high inflation and rapid economic growth. Two committee members voted against keeping the rate unchanged and advocated raising it.
Markets are pricing in a 21 basis point rate hike by December. Today, the release of core PCE inflation for September (forecast 0.3 percent) and US GDP for the third quarter (forecast 3.4 percent versus consensus 3.2 percent) is expected. Pesole expects a moderately positive dollar reaction to these figures.
The European Central Bank is also expected to leave rates unchanged today. High gas and oil prices, according to the strategist, reduce the likelihood of a noticeable "dovish" turn by the ECB. Gas prices reached 100 euros per megawatt-hour the day before.
HSBC set support for the EUR/USD pair at 1.1086 and resistance at 1.1244. For GBP/USD, support is indicated at 1.3165 and resistance at 1.3451. The LSEG consensus forecast assumes growth of EUR/USD to 1.14 and GBP/USD to 1.33 in the fourth quarter.