We find ourselves in November, and the end of the year is now in clear sight. It seems that the USD is poised to finish the year as the dominant currency once again, with the Swiss franc being the only real contender at this point. It’s a bit disappointing, especially considering that until mid-July, it appeared that the GBP might take the top spot by the year’s end. However, that outcome seems unlikely now, barring a miraculous recovery before the year’s end. At this stage, it’s all about damage control for the Pound against most major competitors as we await the new year, hoping that sustained higher interest rates will lift the Pound from its current struggles.

Despite the potential for significant Pound losses due to the sheer volume of data emerging from the UK, US, and Eurozone, it turned out to be relatively stable. The two key data releases this week were the interest rate decisions for the US and the UK, which occurred on Wednesday and Thursday, respectively. Early on Wednesday, it seemed that the scales were tilting in favour of the US, with indications from the Federal Reserve suggesting a likely hawkish stance in their forthcoming decision. However, this didn’t come to pass, as Jerome Powell hinted that the Federal Reserve’s tightening campaign had likely concluded. Following this announcement, the Pound managed to recover the ground it had lost earlier in the day. This positive momentum continued into Thursday, as the Pound gained further strength against the USD in anticipation of the Bank of England’s decision. This was further fuelled by an unusually hawkish speech by Andrew Bailey following a decision that stood at a split of 6-0-3. Despite these gains, the Pound fell short of breaching key psychological levels, and these gains were relatively short-lived. Later today, the eagerly awaited non-farm employment figures will be released in the US, giving optimists hope for another boost to the Pound should the figures come in softer than anticipated.

Regarding the Pound’s performance against the Euro, this week proved to be disheartening, with the Pound steadily losing ground. This trend was ignited by the release of CPI results from Germany, Spain, and the Eurozone as a whole, indicating that inflation had started to subside.

As we look ahead to the upcoming week, it appears that data releases will be somewhat limited until Friday. Therefore, the early part of the week will be dominated by speeches from Andrew Bailey and Jerome Powell, scheduled for Wednesday and Thursday, respectively. These speeches will be closely watched by traders, with particular attention on Powell’s stance following his dovish tone this week after the latest Federal Reserve meeting. On Friday, we will witness the release of the latest GDP figures, with reports suggesting it will remain flat at 0% and persist at this level until 2025. This could mark the beginning of a challenging journey for the UK economy. Later on that same day, the US will reveal Consumer Sentiment data, a key economic performance indicator favoured by the Federal Reserve, and as such, it could trigger a significant amount of market volatility.