Few analysts had expected the Federal Reserve to raise interest rates in October despite its chairperson's earlier insistence that it would be a "live" meeting this month (meaning an increase was not out of the question). However, the US central bank's statement gave investors every reason to believe that a rise could be coming in December. It was the Fed's strongest hint to date and it sent the dollar a swift cent and a half higher against the euro.
As usual, when investors swarm into the dollar they swarm out of the euro faster than they leave the pound. As a consequence, the dollar went up by a cent and a quarter on the week against the euro but gained less than a cent against sterling. Stronger-than-expected US durable goods orders were offset by economic growth of just 0.4% in the third quarter, which lagged Britain's 0.5% expansion.