Weekly Market Update: Nov 7 2025 - BOE Caution Puts Sterling Under Pressure

US: USD edged higher

Private employment data (via the ADP survey) showed an unexpected rebound of 42,000 jobs added in October, surprising given the backdrop of a partial government shutdown.

Markets continue to anticipate fewer near-term cuts by the Federal Reserve, given resilient labour‐market signals and modest inflation.

Implication: USD found support, especially against GBP, as safe-haven demand and rising yields helped maintain its strength.

Eurozone: EUR remains in limbo

No major policy changes from the European Central Bank this week, and few standout economic surprises. Growth remains sluggish, inflation moderate, and investors appear hesitant to push EUR firmly higher.

Implication: EUR held within a narrow band versus USD and GBP, with the lack of fresh impetus keeping it range-bound until a clear catalyst emerges.

UK: GBP under pressure

The Bank of England kept interest rates at 4.0 %, signalling that cuts may be likely in December, citing inflation “judged to have peaked” at 3.8 % and subdued growth projections.

With domestic momentum weak and yield differentials narrowing, the pound struggled, not least in the wake of Rachel Reeves's pre-emptive speech on Tuesday morning providing a preview of the tone of the Budget statement on November 26th.

Implication: GBP remained vulnerable, particularly versus USD and EUR, as markets discounted upcoming cuts and weighed the UK’s relative economic softness.

FX Snapshot & what to watch

• USD vs EUR: USD held firm, EUR/USD traded near the lower end of its recent range.
• GBP vs USD: GBP underperformed, GBP/USD remained near multi-week lows as yield differentials favoured USD.
• GBP vs EUR: EUR/GBP edged higher as sterling lagged, though no dramatic move occurred.
  

Next week’s US non-farm payrolls, any further BoE commentary, and ECB signals as potential catalysts for shifts in FX flows.

Outlook

USD strength is likely to persist in the near term absent a sharp data miss in the US or a policy surprise from the ECB. EUR remains stuck in a holding pattern, while GBP carries a downside tilt until UK activity data or UK inflation prints change the narrative.

This update does not constitute investment advice. Past performance is not indicative of future results.