In the London market, GBP/USD is expected to trade with the Middle East situation in focus, while attention is likely to center on the content of speeches by BoE officials and the outlook for monetary policy. In euro-related trading, movements in French government bonds also warrant attention.
In today's London market, GBP/USD is expected to be assessed against a backdrop of concern over the situation in the Middle East, with speeches by BoE Deputy Governor Breeden and Bank of England Monetary Policy Committee member Mann drawing particular attention. EUR/USD will continue to be monitored for movements in French government bonds.
Expectations of a rate hike at the 5 November MPC meeting are rising after the September MPC meeting indicated a 6-3 decision to hold rates. A key focus will be how the speeches assess the risk of higher energy prices feeding through into the economy.
MPC member Mann continues to argue for keeping interest rates high, and future remarks may indicate the strength of her concerns about inflation. On the fiscal front, attention is also focused on how the publication of the autumn budget will affect the inflation outlook.
In the Middle East, although President Trump's remarks ahead of the midterm elections are having an impact, the intensifying fighting between Saudi Arabia and Yemen's armed Houthi movement is increasing uncertainty in the market.
The projected GBP/USD range is an upper limit of $1.3375 and a lower limit of $1.3181. For EUR/USD, a range with an upper limit of $1.1271 and a lower limit of $1.1161 is cited.