Weekly Market Report: 4th – 8th October 2021

Monday 4th October -The Pound continued to improve on Monday as the fuel crisis looked to be easing as the UK Government deployed the military to help deliver fuel to those areas still struggling.

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Despite the gains, they were capped as there are warnings that it could take an additional ten days for stock levels to reach what they were. As trading closed, the currency finished at 1.1716 against the Euro and 1.361 against the US Dollar according to the Foreign Exchange Market.


There was a lack of data across the Eurozone yesterday and that caused the Euro to weaken slightly while it suffered from a lack of direction. However, the ongoing energy crisis still caused concerns for investors and this meant that the single currency did experience some losses as a result.

The US Dollar also lost some ground on Monday following a disagreement between the Democrats and Republicans on the US Federal debt limit. The US is looking as though it is going to default on its debt and that means that Congress is struggling to agree on how to increase the debt ceiling, causing investors to lose confidence in the Greenback.

Tuesday 5th October

There was little in the way of movement for the Pound yesterday as it moved in a narrow range as the better-than-expected services PMI was met with certain caveats.

As the services sector increased at a good pace in September, the disruption to the supply chain only stifled growth. Furthermore, these additional costs were passed onto consumers with the inflationary pressures starting to cause issues. As a result, the currency finished at 1.175 against the Euro and 1.3628 against the US Dollar according to the Foreign Exchange Market.

The Euro lost ground against a large number of peers yesterday as the services PMI in the Eurozone dropped in September to 56.4 from 59. Furthermore, the ongoing energy crisis continued with natural gas prices hitting record pieces and this caused concerns over gas storage levels, all of which weighed heavily on the single currency.

The US Dollar also dipped yesterday as a change in risk appetite saw investors shun the appeal of the Greenback. This change of direction from investors came about as a result of the property sector crisis in China and concerns about the Us defaulting on debt.

Wednesday 6th October

There was little in the way of hope for the Pound on Wednesday after it remained range-bound after it was announced that 66% of manufacturers expected prices to increase in the lead up to Christmas as a result of inflationary pressures.

Additionally, UK construction PMI also came in lower than expected as the supply chain continued to cause problems for the UK economy. As a result, the currency finished at 1.176 against the Euro and 1.3588 against the US Dollar according to the Foreign Exchange Market.

Through yesterday’s session, the Euro took a dip after factory orders in Germany fell by 7.7% in August which is worse than expected. Euro investors were also concerned by the disappointing retail sales which came in at 0.3% as opposed to the expected 0.8%.

It was a mixed day for the US Dollar yesterday as a change in market mood resulted in the Greenback failing to take advantage of any gains it had made. There was positive news in the form of US ADP employment figures which came in above expectations which shows that the labour market is growing although this somehow managed to put a dent in the US Dollar.

Thursday 7th October

After the announcement from the UK government that it would have enough energy supplies to cope with demand in the winter, the Pound strengthened against many of its rivals on Thursday.

Additional support came from comments made by the Bank of England which said that inflationary pressures are likely to last longer than originally expected. This saw the currency finish the day at 1.1785 against the Euro and 1.3617 against the US Dollar according to the Foreign Exchange Market.

The Euro weakened through the day following a decline of 4% in German industrial production which was a lot higher than the 0.4% that was expected. This came after energy costs increased and disruption to the supply chain caused problems, causing concerns that a bottleneck recession could be possible.

The US Dollar lost ground to many of its rivals yesterday after an on-risk mood meant that the Greenback lost some of its appeal. Along with this, there was further pressure from the looming deadline for a debt ceiling extension, stoking concerns that the US would default on payments.

Friday 8th October

On Friday, the Pound moved higher against many of its peers, despite ongoing concerns about the energy crisis gripping the UK.

A positive market mood gave the currency a boose as well as a strong recovery in the UK stock market. This saw the Pound finish at 1.1761 against the Euro and 1.3613 against the US Dollar according to the Foreign Exchange Market.

As the Euro moved through the session on Friday, it weakened as it reacted to news that the balance of trade figures in Germany came in lower than expected. Trade surplus in Germany shrunk to its smallest since May 2020 coming in at €10.7bn as opposed to €14.4bn that was expected. There is no data due to be released today which means that the single currency might face further headwinds.

There was a significant amount of selling pressure placed on the US Dollar on Friday after the US non-farm payrolls report came in under expectations. September was the worst month this year for payroll figures, as only 194,000 jobs were added, which was a lot less than the 500,000 that was forecast.


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