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GBP: Downside risks – ING

EUR/GBP is trading back above 0.88 again after yesterday's release of surprisingly soft September unemployment data in the UK, ING's FX analyst Chris Turner notes.

Political noise could push EUR/GBP to new highs

"Even though there are widespread doubts about the quality of the Labour Force Survey data (this survey was briefly suspended in 2023 to reassess its quality), sterling has failed to reclaim its losses."

"A further negative today is news that PM Starmer could face a leadership challenge after the budget later this month. Even though Starmer's approval ratings are very poor, his removal would create some doubt about the future of Chancellor Rachel Reeves and add some risk premium to UK asset markets."

"GBP already has enough negative news from the tighter fiscal/looser monetary policy story to keep it weak. But political noise could push EUR/GBP to new highs for the year in the 0.8870/8900 area."

Probably, not much happened – Commerzbank

Today, Wednesday, marks the 43rd day of the US government shutdown, and there is a good chance that it will be ended by the House of Representatives and a subsequent signature by the US President.
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China’s C/A: Weathering the tariff war – Standard Chartered

Peak fear around US-China tariff war is likely behind us; we expect tariffs to stay at current levels in 2026. Diversification, upgrading, and innovation to help China maintain export competitiveness, Standard Chartered's economists report.
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