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GBP, EUR, AUD, USD Exchange Rate Update – Catalonia Declares Independence, US GDP Jumps

27 October 2017 by News Desk

Currency experts FC Exchange recap on Friday's market movement and other major exchange rate events from this week.

The pound made advances against the euro (GBP/EUR) on Friday as markets looked towards next week’s Bank of England (BoE) interest rate decision. There’s plenty of speculation in the market as to whether the central bank will increase rates for the first time in a decade but with inflation residing 1.0% above target, investors are hoping the bank’s hand will be forced and cause policymakers to act. The announcement is due midday next Thursday 2nd November and sterling’s likely to experience some volatility around this time.

Meanwhile in Europe, Catalonia declared independence on Friday in defiance of the Spanish government. It’s expected the government will move to fire the Catalan President and impose direct rule within a matter of hours. Political disruption could create some euro movement as investors shy away from uncertainty.

Earlier in the week the euro experienced some downward movement following the European Central Bank’s (ECB’s) monetary policy announcement and follow-up press conference. Central bank President Mario Draghi spoke on Thursday and the euro slid by as much as 0.8% versus the US dollar (EUR/USD) as economists took the statement to be dovish. The ECB will begin tapering its massive quantitative easing programme next year in what appears to be a very gentle exit.

In Australia, the Aussie dollar suffered losses on the back of weaker-than-forecast inflation numbers and speculation as to when the Reserve Bank of Australia (RBA) might be inclined to hike interest rates. Headline inflation dropped to 1.8% on the year.

Meanwhile, the US dollar gained some strength when US gross domestic product (GDP) growth beat forecasts, coming in at 3.0% in the third quarter.

Disclaimer: This economic update is provided by FC Exchange a Global Reach Group Company, industry leaders in foreign exchange. Authorised affiliates are permitted to reuse content.

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