Key Headlines:

• GBP declines amid signs of UK economic contraction.
• Rising concerns over stagflation may place additional pressure on the pound.

Recap

GBP faced further losses following weak October growth figures, with GBPEUR slipping further from its April 2022 highs as markets begin to anticipate a convergence in BoE and ECB rate policies in 2025. Meanwhile, the USD, despite initial weakness in the morning, extended its winning streak to a seventh consecutive day by market close.

Today’s Rates

Today's Interbank Rates at 09:34 am against GBP movement.

GBP>EUR – 1.2043

GBP>USD – 1.2664

EUR>GBP – 0.8300

EUR>USD – 1.0516

GBP>CAD – 1.8016

GBP>AUD – 1.9872

GBP>SEK – 13.872

GBP>AED – 4.6519

GBP>HKD – 9.8460

GBP>ZAR – 22.608

GBP>CHF – 1.1272

GBP>PLN – 5.1339

Today’s Key Takeaways

• Key Data for GBP This Week: PMI numbers (Monday), job data (Tuesday), inflation figures (Wednesday), BoE rate decision (Thursday), and retail sales (Friday).
• BoE Outlook: Markets remain cautious about potential stagflation risks for 2025, which could weigh on GBP. No rate cuts are expected at this week’s meeting, but the BoE's outlook remains pivotal.
• Fed Meeting on Wednesday Night: A 25bps rate cut is widely anticipated, but any signal of reduced rate cuts for 2025 could further support USD strength. No dovish surprises are expected.
• Bank of Japan Rate Decision: Markets assign a 20% chance of a rate hike, with recent reports suggesting no changes. JPY could weaken further depending on the accompanying statement.

16th December 2024

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