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 GBP/USD Month Outlook
During September, GBP/USD depreciated at its fastest rate since April 2022 as
weak UK economic data, slowing inflation and a surprise Interest rate halt by the
BoE all acted to weaken Sterling. We expect little to change in October.

GBPUSD is currently trading at a 6 month low in the 1.20-1.21 band as a result

of the difference in the growth rates of the two economies (2.1% US QoQ
growth vs 0.2% UK QoQ growth), falling UK inflation and the BoE halting
Interest rates at 5.25% flatten Sterling

Data releases on the 3rd of October suggested that both UK food and energy
bills are falling, a good sign that overall UK inflation should continue its
decline and a bad sign for any Sterling bulls

Recently released US JOLTS job openings data continued to suggest that the
US labour market was strong and estimates of the next Non-Farm Payroll
figure are climbing, a Dollar bullish signal

Overall, we feel that GBPUSD will continue to struggle throughout October,

trading in the 1.20-1.24 range for most of the month
GBP/USD Month Outlook
 GBP/EUR Month Outlook

GBPEUR has collapsed out of the 1.16 range that it occupied for most of Q3 to fall
1.30% from September 1st to October 3rd, largely owing to the BoE undershooting
market expectations of the future UK interest rate.

GBPEUR is currently trading in the low end of the 1.15 band after weakening
significantly in September as the Bank of England held the UK interest rate at
5.25%
The ECB did hike the Eurozone interest rate by 0.25% in September but
signaled this would likely be the last hike of the cycle as inflation eases
This view seemed to be rectified the following week as Eurozone flash inflation
figures suggested the rate of price increases fell from 5.2% in July to 4.3% in
August, slightly weakening EUR
Overall, both economies remain in similar situations and most of the serious
movement was likely spent in September, we expect GBPEUR to trade in the
1.14-1.17 region for most of the month
GBP/EUR Month Outlook
 GBP/AUD Month Outlook
GBPAUD followed the trend of most other GBP crosses to weaken by nearly 3%
in September, with Sterling only slightly recovering on the 3rd of October as the
Reserve Bank of Australia kept the AUS Interest rate at 4.10%

GBPAUD had a poor September as the BoE undershot market Interest rate
expectations and UK inflation fell
There was a dearth of relevant Australian releases in September due to the
RBA’s propensity to release figures on a quarterly basis
However, on the 19th of October Australian employment figures release,
expected to show a continued tight labour market which could strengthen
AUD
Following shortly afterwards on the 25th of the same month Australian
inflation figures release, expected to show inflation relatively unchanged
from the Q1 figure of 6%
Overall, with early inflation indicators in the UK such as energy prices and
food prices pointing to a continued slowdown in inflation to come, we are
cautiously bullish on GPBAUD’s prospects
GBP/AUD Month Outlook
 EUR/USD Month Outlook
EURUSD is currently trading at an 11 month low as a hawkish Federal Reserve keeps the
Dollar strong whilst the ECB strikes a more dovish tone, heavily implying that the most
recent 0.25% rate hike will be the last in the Euro area.

A weak Eurozone economy that could see Germany slip back into recession in Q4 2023 as
well as a dovish Central Bank combined to weaken the Euro all throughout September
and the early days of October

US job openings data showed the largest leap in new vacancies since August 2022 in a
strong sign before what is likely to be a Dollar bullish Non-Farm Payroll Figures on the
6th of October

Early Eurozone flash inflation figures for September suggested that the rate of price
increases slowed from 5.2% down to 4.3%, news that further weakened EUR

German manufacturing sentiment 20% worse than this time last year, economic
weakness is what seems to have prompted the ECB to halt its rate campaign

Overall, we feel that EUR is overvalued against USD and that EURUSD will likely sit in the
1.07-1.09 range for most of the month
EUR/USD Month Outlook
 AUD/USD Month Outlook
AUD just came off an 11 month low against USD on the 4th of October and had
been under considerable pressure from its American cousin all throughout
September. We expect AUDUSD to remain relatively weak throughout October
unless Australian inflation surprises with a higher figure late in the month.

US bond yields reaching 2007 highs as expectations of more rate hikes to come
from the Fed mount and US economic data remains resilient, at the same time
that long awaited Australian figures release late October

This creates a difficult to forecast situation as an upwards surprise to Australian

inflation figures releasing on the 25th could see AUD reverse some of USD’s
rally

However, our base case still assumes that US economic data remains strong all
throughout October, keeping AUDUSD generally weaker
AUD/USD Month Outlook
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