ChamberFX Valuable Insights
These valuable insights are provided by Damon Ellam, International Payments UK, MoneyCorp. Damon is our regional representative and will be providing useful monthly FX forecasts to help chamber members with their currency strategies.
Good Afternoon,
Welcome to my October newsletter. I hope you find it useful and informative.
This month we have GBP/USD analysis from our new Head of Economics & Market Strategy, Neil Parker. Neil was most recently Director of Market Strategy at NatWest, and he will be a fantastic asset for Moneycorp & our clients to utilise going forward when navigating financial markets. I look forward to bringing you more of his insights in the future. I have also attached my FX Forecast pack for October, giving an overview of last month’s events, as well as GBP/USD, GBP/EUR and EUR/USD forecasts from major financial institutions.
I feel that GBP is in a holding pattern until the UK Autumn Budget in late November, however, US and European markets will continue to move FX major FX markets. Today, a US government shutdown was announced. Shutdowns occur because the US government has a separation of powers such that the appropriation and control of government funds lies in the hands of the US Congress. Any disagreements over budget allocations (between the arms of government) can prompt a shutdown. During a shutdown, government statistic agencies are also closed, meaning the longer the shutdown lasts, the more data there is that will be delayed. In December 2018, the shutdown lasted a record 35 days, which would mean all of the following data points would be delayed:
- Weekly Initial & Continuing Claims, released every Thursday.
- Wed 1st: Construction Spending (for Aug. 2025)
- Fri 3rd: Non-Farm Payrolls (for Sept. 2025)
- Tue 7th: Balance of Trade, Exports, Imports (for Aug. 2025)
- Wed 15th: Consumer Price Index (for Sept. 2025)
- Thu 16th: Producer Price Index (for Sept. 2025)
- Thu 30th: GDP Growth Rate Est (for Q3 2025)
It is uncertain how long this shutdown could last, with previous shutdowns lasting from hours to 35 days. Previous market reaction has been negative for the USD, with it weakening 2% during the last shutdown. This presents potential uncertainty, and therefore volatility within currency markets. As always, during major events like this, to protect your business the safest thing to do is proactively take action in advance. If you'd like to speak about booking any deals today or in the coming days, be it spot, forwards or options, please let me know and I'll be very happy to help.
Outside of the US government shutdown, the most significant dates to keep an eye on for FX market volatility this month are:
- Fri 3rd: US Non-Farm Payrolls (delayed if shutdown not settled today)
- Wed 15th: US CPI inflation (could be delayed if shutdown
- Thu 16th: UK GDP
- Wed 22nd: UK CPI inflation
- Wed 29th: US Federal Reserve (FOMC) meeting
Weekly FX Briefs
Contact
For further information and advice on Hull & Humber's ChamberFX, or for assistance with your currency strategy, please click here or contact Lorraine Holt at l.holt@hull-humber-chamber.co.uk or call 01482 324976.
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