Asset Summary – Monday, 29 September
GBPUSD faces downward pressure due to a combination of factors. The Bank of England’s uncertain policy stance, with differing views on interest rate cuts among policymakers, creates volatility. Persistently high UK inflation adds to the economic headwinds. Furthermore, political proposals involving significant borrowing and potential nationalization contribute to market unease, specifically impacting gilt yields. The pound’s weakness is exacerbated by a strengthening US dollar, driven by positive US economic data that reduces expectations for Federal Reserve rate cuts. This confluence of domestic and international factors suggests a challenging outlook for the currency pair.
EURUSD faces a complex and uncertain outlook. The euro’s recent dip below $1.17 reflects the tug-of-war between diverging monetary policies and evolving trade dynamics. While the expectation of further rate cuts by the Federal Reserve could weigh on the dollar, the US economy’s apparent strength might counter this pressure. Conversely, the anticipated end of the European Central Bank’s easing cycle may offer some support to the euro, although the mixed economic signals from Europe, particularly the manufacturing sector’s struggles, create headwinds. Furthermore, escalating trade tensions, including potential tariffs on both pharmaceutical products and steel imports, introduce a significant element of volatility and could impact the relative attractiveness of both currencies. These crosscurrents suggest a period of choppy trading for the pair as markets attempt to price in these competing factors.
DOW JONES faces a mixed outlook as it begins the week with flat futures after a slight decline in the previous week. While the broader market experienced a cooling of the AI rally and concerns regarding Federal Reserve rate cut expectations due to robust economic data, the Dow has demonstrated resilience. Investors are awaiting crucial employment data later in the week which could sway sentiment. Despite recent headwinds, the Dow is currently positioned to conclude September with a gain.
FTSE 100 is demonstrating positive momentum, having reached 9285 points on September 26, 2025, marking a 0.77% increase from the prior trading day. Recent performance indicates steady growth, with a 0.32% rise over the last month. Furthermore, the index exhibits substantial gains year-over-year, showing an 11.59% appreciation compared to the corresponding period in the previous year, reflecting overall positive market sentiment within the UK’s leading companies.
GOLD is experiencing upward price pressure, reaching record highs due to several interconnected factors. A weakening US dollar makes gold more attractive to investors holding other currencies. Anticipation of interest rate cuts by the Federal Reserve further supports gold, as lower rates reduce the opportunity cost of holding the non-yielding asset. Economic data releases, particularly inflation figures, are reinforcing expectations of these rate cuts. However, uncertainty remains, with investors closely watching upcoming economic indicators to gauge the overall health of the US economy. The possibility of a US government shutdown and newly announced tariffs are adding to economic anxieties, potentially driving investors toward gold as a safe-haven asset.