Rainstone FX Ltd 26th October 2026
A very busy week begins relatively quietly. Currency markets are holding steady ahead of a series of central bank decisions, the UK Budget and key US growth and inflation data. The euro has started the week slightly firmer after concerns around France eased at the end of last week, but plenty of uncertainty remains.
Market Recap
EUR: The euro started the week slightly higher after fears of an immediate escalation in France's financial situation eased. However, concerns remain around the country's budget and borrowing costs, with French borrowing costs still near their highest levels in more than two decades. EUR/USD is trading around 1.122, while markets continue to watch developments in France closely ahead of a key budget vote this week.
GBP: Sterling is trading steadily in the high 1.33s against the dollar and close to 1.19 against the euro. With the Budget just days away, traders are waiting to see whether the government's plans support confidence in the UK economy and public finances.
USD: The dollar is on the back foot after a second consecutive weekly loss. A move in oil prices and US bond yields easing back towards 5% have kept it near a three week low. The Fed is expected to hold rates on Wednesday, so attention will be on whether policymakers continue to signal another rise before year end.
Oil: Oil prices retreated from highs on Monday after Brent reached $117 on Friday, its highest level since May. Prices remain elevated enough to keep inflation concerns alive ahead of a week packed with central bank decisions.
Key Events This Week
Monday: German business confidence (Ifo)
Tuesday: US consumer confidence
Wednesday: Australian inflation, RBNZ decision, UK Budget, Bank of Canada decision, Fed decision
Thursday: ECB decision, US growth (GDP), US inflation (PCE), Japan inflation
Friday: Bank of Japan decision, Germany and Eurozone GDP
Wednesday is likely to be the busiest day of the week. The UK Budget is the key event for sterling. Chancellor John Healey is attempting to support households facing higher energy costs without significantly increasing borrowing. Analysts expect the room available under the government's borrowing rules to narrow to around £15 billion, so a Budget without major surprises could be viewed positively by markets.
The Fed follows in the evening and is widely expected to hold rates at 3.75% to 4.00%. Markets will be focused less on the decision itself and more on any clues about what comes next.
Elsewhere, both the Bank of Canada and the RBNZ are expected to raise rates. Markets will be looking closely at their guidance for any hints of further tightening.
Thursday belongs to the ECB. Rates are expected to remain unchanged at 2.50%, with any further increase more likely in December. Investors will be listening carefully for comments on France and whether policymakers believe recent concerns are beginning to ease. US growth and inflation figures are released on the same day, making Thursday another potentially significant session for both the euro and the dollar.
Rainstone Insight
The busiest weeks in currency markets often start with very little movement. With so many major decisions clustered together, many investors prefer to wait for clearer direction before making large moves.
For businesses and private clients, this is often a good time to focus on planning rather than prediction. Knowing your target rate, payment deadline or overall budget before markets move can make decision making much easier when volatility returns.
With the UK Budget, the Fed, ECB, Bank of Canada, RBNZ and Bank of Japan all making announcements within a matter of days, the final week of October has the potential to shape currency markets well into November.
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.
Contact Rainstone FX | Speak to a Dealer