Key Headlines:

·        The EUR takes centre stage as markets await the ECB's upcoming announcement.

·        The AUD rebounds, supported by stronger-than-expected employment figures.

Recap

US CPI data met expectations yesterday, with the core monthly figure steady at 0.3%, matching the prior month and reinforcing the likelihood of a 25bps Fed rate cut next week. The USD saw modest gains on the day. Meanwhile, the Bank of Canada delivered a widely anticipated 50bps rate cut but signalled a cautious approach to further easing, emphasizing a meeting-by-meeting evaluation. This led to a decline in GBPCAD, which once again failed to break through resistance levels.

Today’s Rates

Today's Interbank Rates at 10:03 am against GBP movement.

GBP>EUR – 1.2139

GBP>USD – 1.2762

EUR>GBP – 0.8236

EUR>USD – 1.0511

GBP>CAD – 1.8037

GBP>AUD – 1.9884

GBP>SEK – 13.980

GBP>AED – 4.6871

GBP>HKD – 9.9240

GBP>ZAR – 22.506

GBP>CHF – 1.1313

GBP>PLN – 5.1954

Today’s Key Takeaways

• ECB Meeting Focus: Markets are now leaning towards a 25bps rate cut, a shift from November’s 50bps expectations, largely influenced by concerns over Trump’s tariffs on the Eurozone economy. If the ECB downgrades its growth outlook, the EUR could weaken, though forward guidance may provide limited clarity on future rate policy.

• US PPI Data: Producer Price Index inflation figures are due, but minimal impact on the USD is expected.

• AUD Performance: The AUD rallied overnight after jobs data exceeded expectations, with unemployment at 3.9% versus the forecasted 4.2%. Dovish rate pricing for May has eased slightly.



• JPY Weakens: A Reuters report suggests the Bank of Japan may keep rates steady next week, contributing to JPY softness.

12th December 2024

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