Monthly Currency Outlook - October 2021

Written by George Vessey, UK Currency Strategist 

Highlights include:

USD:  Nonfarm payrolls will be an important guidepost for the near-term trajectories of the dollar and Fed policy.
CAD:  The outlook for cross-border interest rates will be an important factor for USD/CAD over the coming months. Both Ottawa and Washington appear on track to raise borrowing rates around the second half of 2022.
GBP:  After finding its footing at $1.36, GBP/USD looks poised to test higher ground though. The $1.38-$1.39 area of congestion could be difficult to overcome, but the $1.40 psychological level is a key upside target.
EUR:  Concerns about likelihood of real estate turmoil in China spilling over to global financial markets could drag on the euro. A market sell-off would see the European currency weaken.
JPY: A US shutdown would stress credit markets and likely trigger turmoil on the US stock market. Such an event would benefit the yen.