Weekly Currency Round Up: Friday Update
Rainstone FX Ltd, 23rd October 2026
Sterling ends the week in good shape, helped by hotter UK inflation and strong business surveys, while the euro slid to a fresh 17 month low against the pound as concerns around France deepened and eurozone growth slowed. The dollar drifted to a three week low as worries around AI related spending kept US bond yields down, even though US data remained strong.
What moved the markets this week
GBP
UK inflation rose to 3.5% in September, above the 3.4% expected and its highest level in almost a year. Fuel prices did most of the damage, though underlying inflation measures edged higher too. Markets now see a Bank of England rate rise on 5 November as close to certain, with many expecting another move in December.
The pound barely moved on the day as the inflation print was largely priced in already, but GBP/USD reached a four week high near 1.34 on Thursday.
Friday brought a mixed picture. UK retail sales fell 0.4% in September, weaker than expected, with warmer weather hurting autumn clothing sales. Despite that, sales were still up 0.7% over the last three months. Consumer confidence also fell sharply ahead of the Budget. Business surveys were more encouraging, showing activity picking up through October, helping sterling remain supported into the weekend.
EUR
The euro had a difficult week, with France remaining the main concern. Weekend unrest pushed French borrowing costs higher on Monday, while a key budget vote in the French parliament was postponed on Tuesday. As a result, the premium France pays to borrow compared with Germany remains close to its highest level since the eurozone debt crisis.
Friday's business surveys added further pressure. Growth across the eurozone slowed by more than expected, with France slipping back into contraction. German manufacturing remained relatively resilient, but the services sector softened.
The euro fell to a fresh 17 month low against sterling and EUR/USD finished the week close to 1.12.
USD
The dollar slipped to a three week low as concerns around AI related spending kept pressure on US bond yields, with the 10 year yield falling back below 5%.
Friday's data was a reminder of how resilient the US economy remains. Business activity is close to a five year high, hiring remains solid and firms are raising prices at their fastest pace since 2022. Consumer sentiment also held steady.
Markets still expect the Fed to hold rates on 28 October, although another rise before year end remains a realistic possibility.
What to expect next week
On Wednesday 28 October, the Fed is expected to hold rates, while the UK Budget, Bank of Canada decision, Reserve Bank of New Zealand decision and Australian inflation data all arrive on the same day.
The ECB follows on Thursday 29 October and is widely expected to leave rates unchanged, with any further move more likely in December. Markets will also be listening carefully for any comments on the French bond market.
Rainstone Insight
This week was another reminder that markets rarely move on one headline alone. Inflation data, political developments, economic growth, central bank expectations and market sentiment all played a role in shaping exchange rates.
Whether you are paying overseas suppliers, buying property abroad, moving savings internationally or planning a large transfer, having a clear plan is often more valuable than trying to predict every market move.
The final weeks of October are packed with major events, including the UK Budget and several central bank decisions. For businesses and private clients alike, now is a good opportunity to review any upcoming currency requirements and make sure you are prepared for whatever comes next.
If you would like support with your international payments, get in touch with the Rainstone team. We are watching the markets closely, so you do not have to.