Thursday 19/12/2024

John Hall • December 19, 2024

Daily Update 19/12/2024

Key Headlines:

The Federal Reserve signals expectations for just two rate cuts in 2025, reflecting a cautious approach.
Markets anticipate that the Bank of England will maintain current interest rates in its upcoming decision.

Recap

The Federal Reserve delivered a more hawkish stance than anticipated, boosting USD strength and pushing GBPUSD and EURUSD toward yearly lows. While the Fed implemented a widely expected 25bps rate cut, it revised its dot plot to reflect just two rate cuts next year and noted reduced risks to the job market, supporting a slower pace of easing. Market expectations for 2025 rate cuts now align at 35bps. Meanwhile, the Bank of Japan maintained its rates, with the cautious policy decision interpreted as dovish, leading to broad JPY weakness.

Today’s Rates

Today's Interbank Rates at 09:40 am against GBP movement.

GBP>EUR – 1.2153

GBP>USD – 1.2661

EUR>GBP – 0.8229

EUR>USD – 1.0420

GBP>CAD – 1.8222

GBP>AUD – 2.0282

GBP>SEK – 13.962

GBP>AED – 4.6506

GBP>HKD – 9.8390

GBP>ZAR – 23.099

GBP>CHF – 1.1349

GBP>PLN – 5.1806

Today’s Key Takeaways

USD has pared back some of last night’s gains, but its strength is expected to persist through the end of the year.
The Bank of England’s meeting today is anticipated to have minimal impact, with no press conference planned and rates expected to remain unchanged.
Any hawkish signals from the BoE could bolster GBP, potentially driving it to test new highs against EUR, AUD, and CAD as the year concludes.

19th December 2024

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