FX markets

Daily Market View 04-02-2026

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1:30

6 Month High in GBPEUR Suggests a Hawkish BoE Tomorrow

1 Minute Market Rundown

Sterling trades at its best against the Euro since August as traders start to bet BoE will strike a hawkish tone tomorrow.
Dollar still struggles as Non-Farm Payrolls cancellation on Friday saps the market of some much needed direction.
Busy day of speculation ahead of ECB and BoE tomorrow.

GBP-

Somehow, the pound is managing to rally despite the real lack of serious conviction one way or the other. The French budget has acted to pull down French yields, wounding the Euro, whilst UK 10 year gilts yields stay elevated.

Naturally, this sets a very attractive GBP bullish play in the short run, although how long it takes for UK gilts to begin to stick out from the pack in a bad way is only a matter of when, not if.

Screenshot 2026-02-04 092156

With the Japanese election this Sunday and the partial US Gov shutdown having no end in sight, the market seems to be underestimating the level of true risk. This could set up a Dollar rally, depending especially on how things go with the Japanese election. Trump is under serious fire at home, which generally means he's going to lash out on the foreign stage to try and distract Americans.

With such little sentiment however, anything could shift quickly.

Markets Today

*Please be aware the below rates represent the market rate at 8:00 AM, contact your Caxton dealer or check online for a live quote.

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