As the final quarter of 2025 gets underway, global markets are navigating a quieter economic data week, at least on the surface. The ongoing US government shutdown has paused many official data releases, but the FX market outlook remains lively, shaped by central bank speeches, minutes, and cross-border developments. This week, volatility could come less from new statistics and more from the tone of policymakers and shifting expectations across major currencies.
Key Data and Events This Week
- Monday 6 October:
- UK Construction PMI release – expected to show continued contraction but with possible signs of stabilisation.
- ECB President Lagarde and BoE Governor Bailey both speak; their remarks on inflation persistence and the rate path will be closely watched.
- Tuesday 7 October:
- Eurozone Sentix investor confidence and retail sales data.
- German factory orders for September are an important gauge of industrial health.
- Wednesday 8 October:
- Federal Reserve meeting minutes (September) – the standout event of the week.
- Japan’s labour earnings data, giving the BoJ insight into wage growth and inflation sustainability.
- Thursday 9 October:
- ECB speeches from Lane, Nagel, and Villeroy de Galhau.
- UK RICS Housing Survey – a measure of housing market sentiment.
- Friday 10 October:
- Bank of Japan policy decision – any signal of tightening could trigger significant yen movement.
- Global energy data and OPEC updates to close out the week.
While the headline US economic releases are limited, the density of central bank communication will likely make up for the quieter data flow.
GBP Outlook
Sterling begins the week cautiously, with limited domestic drivers and sensitivity to global risk sentiment. The FX market outlook for GBP suggests sideways trading unless Governor Bailey or Chief Economist Huw Pill offer any hints regarding the timing of the Bank of England’s first rate cut.
The UK Construction PMI is expected to show modest improvement, though still below 50, marking the ninth consecutive month of contraction. While this reflects a cooling sector, a better-than-expected result could offer brief support for the pound.
Sterling’s larger moves will likely follow external influences, particularly from the dollar and euro, as investors weigh global policy divergence rather than domestic growth momentum.
EUR Outlook
The euro enters the week with its own challenges. Eurozone retail sales and sentiment data will highlight whether consumer activity is holding up amid lingering inflation. The ECB’s Lagarde, Lane, and Nagel are all scheduled to speak, each potentially shaping short-term sentiment.
If the ECB continues its cautious tone, acknowledging that inflation progress has slowed, markets may interpret this as dovish, putting mild pressure on EUR. Conversely, if policymakers express confidence in price stability and future growth, we could see a modest bounce.
German factory orders and industrial production will be key in determining whether Europe’s manufacturing sector has bottomed out or remains under strain.
USD Outlook
The dollar remains dominant, though less data means traders must rely on tone and positioning rather than fresh releases. The Fed Minutes (Wednesday) will take centre stage, revealing how policymakers weighed labour market softening against sticky inflation.
Markets will watch for references to “longer for lower”, the expectation that rates could stay elevated into 2026. Should the minutes reaffirm this stance, USD could strengthen. Conversely, signs of internal division or growing concern about economic resilience could weigh on the greenback.
With reduced US data visibility due to the shutdown, intraday volatility may arise around Fed speakers including Bostic, Barr, and Goolsbee.
Other Currencies and Global Developments
- JPY: The BoJ’s Friday meeting will be pivotal. With wage growth showing resilience, the yen could strengthen if policymakers signal a gradual shift from ultra-loose policy.
- CAD: Oil market developments and the recent OPEC output adjustment could influence the Canadian dollar’s trajectory.
- AUD/NZD: Risk appetite and China’s data flow remain primary drivers, with the Reserve Bank of New Zealand likely to cut rates midweek.
- EM Currencies: Ongoing US dollar strength and reduced risk appetite may keep emerging-market FX under pressure.
How August Exchange Delivers Value
At August Exchange, we help clients navigate weeks like this, when uncertainty, not data, drives FX markets.
- For importers and exporters: We implement forward contracts ahead of volatile events such as Fed minutes or BoJ meetings to protect profit margins.
- For tech firms and global payroll clients: We use named, multi-currency IBANs that streamline cross-border payments while reducing conversion costs.
- For family offices and HNW clients: We provide structured FX hedging to stabilise returns on international investments, using data-timed entries.
- For e-commerce and retail businesses: We monitor global currency performance to identify when to repatriate funds at the best rate, not just the fastest.
Our goal is to combine precise timing with strategic flexibility, ensuring clients benefit even in quieter or uncertain FX environments.
Fact of the Week
The US dollar remains on track to post gains in three consecutive quarters, the first such streak since 2018, underscoring how resilient USD demand has been despite rising global rate cut expectations.
