The pound and euro both lost over half a per cent against the US dollar yesterday after a string of optimistic US data supported the greenback.
US private sector growth accelerated in October as the composite PMI rose to 51.0, up from September’s 50.2. This marked the fastest expansion since July.
On this side of the Atlantic, the UK composite PMI came in at 48.6 in October, relatively unchanged from September’s 48.5 and broadly in line with market expectations.
It was a different story for the eurozone, however, where private sector activity dropped to 46.5 in October, down from 47.2 in September. This fell short of the market consensus of 47.4 and marked the largest contraction in nearly three years.
Labour demand slowed significantly in the UK due to a deteriorating environment amid higher borrowing costs by the Bank of England. The central bank is expected to keep the rate unchanged at 5.25% in its next meeting on November 2.
In the news, UK financial regulators made the formal decision to scrap the cap on bankers’ bonuses. The cap will be abolished on October 31. The move has been condemned by various unions who have claimed the announcement is an “insult to working people.”
Yesterday, Bitcoin rose as much as 11.5% to $35,000 before dropping slightly. The largest digital asset reached its highest price since May last year and takes its annual rebound from its 2022 rout to 108%.
Later this evening, Federal Reserve chair Jerome Powell will speak in Washington and is expected to echo sentiments shared last week that inflation remains too high, and the Fed plans to extend the interest rate pause.
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