Insights into the Latest Currency Movements from Our Founder

The US dollar has remained firm despite the Fed’s recent rate cut. That resilience is being driven by safe-haven demand and strong data. Second-quarter GDP was revised up to 3.8 percent from 3.3 percent, with consumer spending still powering growth. It is a reminder that the US economy has momentum even as policy becomes more accommodative.

Rate cuts usually weigh on the dollar, and if the Fed continues to ease, we may start to see that pressure build. For now though, upcoming events will set the tone. The Core PCE Price Index on September 26 is the Fed’s preferred inflation gauge. A higher reading would point to stubborn price pressures and could affect the pace of future cuts. The Nonfarm Payrolls report on October 3 will then provide another critical look at the labour market. Technically the USD Index is approaching resistance around 98.50, with support near 97.00. Short-term traders will be watching these levels closely.

Sterling has also been resilient but the fundamentals look weaker. UK GDP growth was revised down to 0.6 percent and inflation remains high at 3.8 percent. The expectation is that the Bank of England will follow the Fed and begin cutting rates, which leaves the pound more vulnerable against the dollar. The flash PMIs on September 30 will give an early read on economic activity and if they come in below 50 it signals contraction. The Bank of England’s Monetary Policy Report on October 2 will also shape sentiment. For GBP/USD, resistance sits around 1.2400 while support is at 1.2200, with a possible move to 1.2000 if data disappoints.

The euro is still under pressure, weighed down by Germany’s slowdown and political uncertainty across the bloc. The ECB has already acknowledged slower growth, with GDP expected to fall to 3.1 percent in 2026. Eurozone flash PMIs on September 30 and inflation data on October 1 will be important for judging how much room the ECB has to act. EUR/USD could test the 1.05 level in the near term, with resistance coming in around 1.0800 to 1.1000.

Stepping back, the picture looks like this. The dollar is anchored in the short term and remains supported by both data and sentiment. Sterling has held up well but looks stretched compared to its fundamentals. The euro continues to struggle under the weight of structural and political challenges.