Key Headlines:

• BoE adopts a dovish stance, leading to a sharp decline in GBP.
• USD remains firm, with markets focused on upcoming core PCE data.

Recap

GBP weakened yesterday after three Bank of England members signalled support for a rate cut, citing concerns about economic growth and employment. While the Bank held rates steady, the dovish voting led to a sell-off in GBP and a drop in gilt yields. Some investment banks now suggest markets may be underestimating potential BoE rate cuts next year, projecting 100bps of reductions starting in February, compared to the currently priced 55bps. Meanwhile, upward revisions to US GDP sustained USD strength, keeping the USD index near two-year highs following Wednesday's Fed meeting.

Today’s Rates

Today's Interbank Rates at 09:29 am against GBP movement.

GBP>EUR – 1.2038

GBP>USD – 1.2499

EUR>GBP – 0.8305

EUR>USD – 1.0382

GBP>CAD – 1.7981

GBP>AUD – 2.0048

GBP>SEK – 13.8111

GBP>AED – 4.5899

GBP>HKD – 9.7100

GBP>ZAR – 22.927

GBP>CHF – 1.1202

GBP>PLN – 5.1248

Today’s Key Takeaways

• GBP Weakness Persists: Lower-than-expected UK retail sales highlight growth risks, suggesting that GBP's strong performance this year may not carry into 2025.
• Trump's Message to Europe: President-elect Trump emphasized the need for Europe to reduce its trade deficit with the US by purchasing more US oil and gas, warning of potential tariffs otherwise.
• US Core PCE Inflation Data: Scheduled for release this afternoon, any upside surprises could reinforce the Fed’s hawkish stance from Wednesday and support further USD strength.

20th December 2024

This wraps up our final market report for 2024. A heartfelt thank you for your continued support, business, and engagement this year! Wishing you a wonderful Christmas and festive season, and we look forward to reconnecting in 2025! 🎄✨

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