The GBP/USD pair remains vulnerable ahead of key economic data. Thursday’s US Initial Jobless Claims data signalled a slowdown in the US labour market, hinting at further rate cuts by the Federal Reserve (Fed). However, September’s FOMC meeting minutes and hotter-than-expected US consumer inflation figures have dampened expectations of larger interest rate cuts by the Fed. Headline US CPI inflation fell below expectations for the year ending in September, declining from 2.5% to 2.4%. On the other hand, core US CPI inflation rose year-on-year (YoY) in September, increasing to 3.3% from 3.2%. Additionally, geopolitical risks due to ongoing conflicts in the Middle East could further strengthen the safe-haven Greenback, limiting the currency pair's upside.

On the UK front, market confidence that the Bank of England (BoE) might accelerate its rate-cutting cycle could weigh on the Pound. Today’s UK macro data dump, including monthly GDP print, Goods Trade Balance, and monthly Industrial Production and Manufacturing Production figures, coupled with the US Producer Price Index (PPI), could influence the GBP/USD pair in upcoming trading sessions.

EUR/USD Struggles Ahead of German Inflation Data

The EUR/USD pair struggles to gain momentum around 1.0935, following hotter-than-expected US inflation data. The stronger-than-expected September jobs report, and signs of cooling inflation suggest a gradual approach by the Fed for future rate cuts. On the Euro front, the ECB Monetary Policy Meeting Accounts suggested another rate cut amid economic slowdown, exerting selling pressure on the Euro. However, today's Harmonised Index of Consumer Prices (HICP) inflation data from Germany could support the currency. Apart from European inflation figures, the US economic docket, including the Producer Price Index, Preliminary Michigan Consumer Sentiment Index, and speeches by influential FOMC members, could create market volatility for the EUR/USD pair.

EUR/GBP Holds Steady Following German Inflation; UK GDP Data

The EUR/GBP pair is currently trading around 0.8380 following the release of German inflation data and UK growth numbers. Today’s German Harmonised Index of Consumer Prices (HICP) rose 1.8% YoY in September, aligning with the previous reading and the forecast of 1.8%. The ECB meeting account published on Thursday suggested that policy easing would be gradual and data-dependent. Additionally, policymakers introduced a rate reduction of 25 basis points (bps) in September. On the UK front, Friday's monthly GDP figures showed that the UK economy grew by 0.2% in August, matching market consensus. Apart from today’s economic figures, the ECB's cautious tone and UK employment data due next week will shape market sentiment around the EUR/GBP pair.

USD/CAD Strengthens Ahead of Canadian Job Report

The USD/CAD pair climbed to 1.3745, following robust inflation data and the Federal Reserve's (Fed) hawkish stance. Thursday’s release indicated that core CPI, excluding food and energy, climbed 3.3% YoY in September, above the forecast and the previous reading of 3.2%. Meanwhile, US Initial Jobless Claims for the week ending 4th October rose to 258K, up from the previous week's 225K, exceeding the initial consensus of 230K. On the Loonie front, the Canadian job report is due today, with projections indicating a rise in the Unemployment Rate from 6.6% in August to 6.7% in September. Cooling inflationary pressures and weaker job reports could trigger aggressive rate cuts by the Bank of Canada (BoC), capping the upside of the USD/CAD pair.

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