Key Headlines:

• GBP stays strong, driven by higher yield returns.
• Upcoming US CPI data and Bank of Canada decision could increase demand for USD.

Recap

GBPEUR reached its highest level since April 2022, driven by expectations that the Bank of England will ease interest rates less aggressively than the European Central Bank, which is anticipated to deliver a modest 25bps cut at Thursday’s meeting. GBPAUD also climbed higher following a dovish Reserve Bank of Australia meeting. Meanwhile, the USD extended its winning streak for a third day, bolstered by rising treasury yields and anticipation of today’s CPI data.

Today’s Rates

Today's Interbank Rates at 09:57 am against GBP movement.

GBP>EUR – 1.2122

GBP>USD – 1.2729

EUR>GBP – 0.8248

EUR>USD – 1.0501

GBP>CAD – 1.8055

GBP>AUD – 2.0060

GBP>SEK – 13.991

GBP>AED – 4.6751

GBP>HKD – 9.8950

GBP>ZAR – 22.737

GBP>CHF – 1.1257

GBP>PLN – 5.1710

Today’s Key Takeaways

• US CPI figures are the focus today, with markets watching for upside surprises that could signal increasing inflationary pressures.
• This is the final CPI release before next week’s Fed meeting, where markets currently see an 85% chance of a 25bps rate cut. Upside surprises could lower these odds and support USD strength.
• The Bank of Canada (BoC) could also influence the USD by opting for a smaller 25bps rate cut instead of the expected 50bps. A conservative cut might shift expectations towards no Fed rate cut next week.
• GBPEUR is holding firm after yesterday’s gains, with the potential to revisit March 2022 highs ahead of tomorrow’s ECB meeting.

11th December 2024

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