November 3, 2025

US shutdown disrupts airports as markets await clarity

Reports of widespread delays and cancellations at US airports highlight the growing impact of the government shutdown. If the disruption extends to critical areas such as freight, port operations, and regulatory inspections, pressure on lawmakers to agree temporary funding measures may intensify. Political commentary remains divided.

Some Republican leaders suggest Democrats will revisit negotiations after state elections conclude, while Democratic sources indicate the shutdown could persist beyond that point. In the meantime, key economic releases—including non-farm payrolls—will not be published this week.

Despite the absence of data, the US dollar has held firm, reflecting last week’s Federal Reserve guidance that reduced expectations for a December rate cut.

 

GBP awaits BoE MPC decision as PMIs offer little support

The Bank of England’s Monetary Policy Committee meets on Thursday, with the decision scheduled for midday (GMT) followed by the quarterly monetary policy report and press conference. No change in interest rates is expected, leaving the UK with the highest policy rate among major economies.

Ordinarily, this would support sterling. However, persistent economic weakness, uncertainty around the upcoming budget, and ongoing geopolitical and trade challenges suggest that elevated rates provide only temporary relief. Sterling remains vulnerable to renewed selling pressure, particularly as it continues to trade towards the lower end of multi-month ranges against the US dollar and euro.

Beyond the MPC meeting, the UK economic calendar offers little to bolster sentiment. PMI data is unlikely to shift the narrative, leaving GBP exposed to downside risks.

 

Bank of Canada monitors labour market after rate cut

The Bank of Canada lowered its overnight rate to 2.25% last week but signalled limited scope for further easing in the near term. Attention now turns to Friday’s labour market report. After September’s unexpected strength, October data may reveal a softer trend, with consensus forecasts pointing to a higher unemployment rate and weaker wage growth.

USDCAD briefly dipped below C$1.40 last week before closing higher. A weaker jobs report could renew upward pressure on the pair.

 

Euro Area data unlikely to lift sentiment post-ECB

The European Central Bank left rates unchanged last week, as expected. President Lagarde indicated that December’s meeting is unlikely to deliver a policy shift unless significant developments occur. Inflation expectations continue to moderate, whilst headline and core CPI measures near target.

This week’s focus falls on final October PMIs and September industrial production for Germany and France. These releases are unlikely to provide meaningful support for the euro, and downside surprises in industrial output could weigh on the currency in the short term.

Author 

 

Views expressed in this commentary are those of the author, and may differ from your appointed Moneycorp representative. This commentary does not constitute financial advice. All rates are sourced from Bloomberg and forecasts are taken from Forex Factory.