Currency Forecast: Week of 26 October 2026 — The Budget, the Fed, the ECB and the BoJ

GBP/USD is forecast to trade between 1.3200 and 1.3600 in the week of 26 to 30 October 2026, GBP/EUR between 1.1800 and 1.2050 and EUR/USD between 1.1050 and 1.1300. Four central banks decide inside 72 hours and the UK Budget lands in the middle of them: the Budget on Wednesday at 10:00, the Federal Reserve that evening at 18:00, the European Central Bank on Thursday at 13:15 and the Bank of Japan early on Friday.

What happened to the pound last week?

It rose for five sessions in a row against the euro, and the UK data is why.

GBP/EUR at 1.1943 was its highest ECB reference rate since 2 April 2025 — an eighteen-month high, reached on five consecutive daily gains.

The UK data went the other way, and it matters

Last week we flagged the fall in payrolled employment as the strongest argument against a Bank of England rise in November. That argument weakened on every measure.

On inflation, the Consumer Prices Index “rose by 3.5% in the 12 months to September 2026, up from 3.1% the previous month”, with core CPI up to 2.8% from 2.6% and — the number the Bank watches hardest — “the CPIH services annual rate rose from 3.6% to 3.9%”. Transport, and motor fuels in particular, made the largest upward contribution.

On jobs, the picture improved rather than deteriorated. The unemployment rate “was estimated at 4.7% in June to August 2026… down by 0.1 percentage points on the both the year and the latest quarter”, regular pay growth rose to 3.7%, and the early September estimate of payrolled employees was “largely unchanged between August and September 2026, increasing by 13,000”.

Then Friday’s surveys. S&P Global’s flash UK composite output index reached 53.1 in October from 52.0, an eight-month high, with services also at 53.1 and manufacturing output at a 25-month high. Chief business economist Chris Williamson said “the UK economy has picked up momentum in October” but that “price pressures remain worryingly elevated”. Only retail sales disappointed, falling 0.4% in September.

Firmer inflation, a tighter labour market and faster growth is the combination that moves a split committee. Our GBP forecast tracks the policy path into the 5 November decision.

Wednesday brings two unrelated shocks eight hours apart

This is the practical point for anyone with money to move. The Budget is delivered at 10:00 on Wednesday 28 October. The Federal Reserve announces at 18:00 the same day, with the press conference at 18:30. The Bank of Canada decides at 13:45 in between.

Those two events have nothing to do with each other and can push sterling in opposite directions within one session. A Budget the gilt market dislikes weakens the pound; a Fed that sounds in no hurry weakens the dollar. That is a reason not to leave a large conversion to whatever Wednesday afternoon produces.

Then the ECB on Thursday at 13:15 and the Bank of Japan on Friday at 03:00, with US third-quarter GDP and the core PCE price index at 12:30 on Thursday and euro area GDP and German inflation on Friday. Our GBP/JPY forecast covers the yen side.

Will the Fed raise rates on Wednesday?

Probably not, and the market has largely stopped expecting it. Reporting on 24 October put market pricing at about a 10% chance of a quarter-point increase on 28 October, with a December move widely expected instead.

That makes the statement and the press conference, rather than the rate itself, the thing that moves the dollar. The September minutes recorded that “most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate” — so a hold that leaves December language intact is the base case, and anything softer than that would be read as a change of direction. GBP/USD may trade broadly between 1.3200 and 1.3600. Our GBP/USD forecast and the USD outlook carry the medium-term view.

GBP/EUR and EUR/USD forecast

GBP/EUR may hold a 1.1800 to 1.2050 range and EUR/USD a 1.1050 to 1.1300 range. Sterling has now gained against the euro for five straight weeks, and the euro has an awkward Thursday.

The ECB’s own account of its September meeting noted that its Survey of Monetary Analysts expected “only a final rate hike at the September meeting”. If Thursday confirms that, the deposit rate stays at 2.50% against Bank Rate at 3.75% — a 125 basis-point gap that could widen to 150 if the Bank moves on 5 November. Friday then brings euro area third-quarter GDP and German inflation, and Tuesday’s ECB Bank Lending Survey is a better guide to the Governing Council’s thinking than most of the week’s commentary. Our pound to euro forecast, the euro outlook and the EUR/USD forecast carry the longer view, and the live currency converter shows the mid-market rate now.

The economic calendar this week at a glance

All times are UK (GMT). British Summer Time ended on 25 October but US clocks do not change until 1 November, so US releases fall an hour earlier in UK terms this week than last — 13:30 becomes 12:30, and the Fed announces at 18:00 rather than 19:00.

Release timings and speaker diaries are as scheduled at the time of writing and can change.

What is the three to twelve month outlook for the pound?

After this week the calendar thins out: the Bank of England on 5 November with a Monetary Policy Report, then the Federal Reserve on 8–9 December, the Bank of England again on 17 December and the ECB on 16–17 December.

Sterling’s position has improved on the data rather than on sentiment, which is the more durable kind of improvement. Services inflation at 3.9%, pay growth at 3.7% and unemployment falling all point the same way, and three Monetary Policy Committee members were already voting for 4.00% before any of it. Against that, the Budget is an unknown and the gilt market has been unforgiving: the 30-year yield reached 6.07% on 1 October, reported as the highest since 1998.

None of this is settled. A surprising release, a shift in energy prices, a Budget that unsettles the gilt market or a change in the geopolitical backdrop can move a major pair by more than a cent in a session, and a forecast is a framework for planning rather than a statement of where the rate will be on any given day. The currency forecast hub carries the pair-by-pair ranges.

What does this mean for your currency transfer, and how can you manage it?

Across this week’s ranges, converting £400,000 at an illustrative GBP/EUR of 1.2050 rather than 1.1800 gives €482,000 against €472,000 — €10,000 of difference. On the dollar side, 1.3600 rather than 1.3200 gives $544,000 against $528,000, a gap of $16,000. Those are wider spreads than a normal week because the event risk is genuinely larger, and they cut both ways: for anyone bringing dollars into sterling, $500,000 converts to about £378,800 at 1.3200 and £367,600 at 1.3600.

This is the week in which the tool matters more than the view. A forward contract fixes today’s rate for settlement up to twelve months ahead, taking all four decisions and the Budget out of the equation if your requirement is known. A market order targets a level you would be content to trade at and executes if the market reaches it, including overnight — which matters with a Bank of Japan decision at 03:00. Splitting a requirement into tranches, some before Wednesday and some after, spreads the exposure. Which fits depends on your deadline and how much movement you can absorb, not on a view about the rate.

Frequently asked questions

What is the currency forecast this week?

GBP/USD may trade between 1.3200 and 1.3600, GBP/EUR between 1.1800 and 1.2050 and EUR/USD between 1.1050 and 1.1300 in the week of 26 October 2026. The ranges are wider than usual because four central banks decide and the UK Budget is delivered inside five days. Sterling enters the week at an eighteen-month high against the euro.

What time is the Budget and what time does the Fed decide?

The UK Budget is delivered on Wednesday 28 October at 10:00 UK time. The Federal Reserve announces its decision the same day at 18:00 UK time, with the press conference at 18:30. Because British Summer Time ended on 25 October while US clocks change on 1 November, US events fall an hour earlier in UK terms this week than they did last week.

Why is the pound so strong against the euro?

Because UK data has hardened while the euro area has been under fiscal pressure. UK CPI rose to 3.5% in September with services inflation at 3.9%, unemployment fell to 4.7% and pay growth rose to 3.7%, which makes a Bank of England rise on 5 November more likely. GBP/EUR reached 1.1943 on 23 October, its highest ECB reference rate since 2 April 2025.

Will the Bank of England raise rates on 5 November?

It is not scheduled to decide this week, but last week’s data made a rise more likely. The Monetary Policy Committee held Bank Rate at 3.75% on 17 September in a 6–3 vote, with Megan Greene, Catherine L Mann and Huw Pill preferring 4.00%. September’s inflation and labour market figures both moved in the direction those three were arguing for, and the decision comes eight days after the Budget.

Should I convert before or after the Budget?

That depends on your deadline rather than on a forecast, and waiting is a position rather than a neutral choice. Wednesday carries two separate events capable of moving sterling, and the market usually moves before and after them rather than only at the announcement. If your payment is weeks away you have room to plan; if it falls this week, the practical question is how much movement you could absorb in either direction.

What is the minimum transfer Cambridge Currencies handles?

Cambridge Currencies works with transfers from £5,000 upwards, at competitive rates compared with high-street banks. Every transaction is completed by phone with a dedicated specialist, and the firm operates with FCA-authorised partners Currencycloud and ScioPay.

Speak to a specialist before Wednesday

If you have a euro or dollar payment due in the next few weeks — an overseas completion, a business settlement or a large one-off transfer — Wednesday is the day to have decided about, not the day to decide on. Speak to a Cambridge Currencies specialist about timing a transfer around the Budget and the Fed, or call 01223 608232. Every transfer is handled personally, over the phone, by a dedicated dealer who knows your deadline.

Related guides

• Weekly currency forecast archive — published every Sunday
• Is now a good time to buy euros? — how to weigh an eighteen-month high against a deadline

Sources: Office for National Statistics — Consumer price inflation, September 2026; Office for National Statistics — Labour market overview, October 2026; Office for National Statistics — Retail sales, September 2026; S&P Global — Flash UK PMI, October 2026; Federal Reserve — FOMC minutes, 15–16 September 2026; Federal Reserve — FOMC calendar; European Central Bank — Governing Council meeting calendar; European Central Bank — euro foreign exchange reference rates; Bank of England — September 2026 Monetary Policy Summary and minutes; Bank of England — upcoming MPC dates; GOV.UK — Budget 2026 date; Office for Budget Responsibility — autumn 2026 forecast date; TokenPost — market pricing ahead of the 28 October Fed decision, 24 October 2026. Release timings are as scheduled at the time of writing.