Wednesday 18/12/2024

John Hall • December 18, 2024

Daily Update 18/12/2024

Key Headlines:

UK Inflation Update: Inflation figures met expectations, keeping the focus on the BoE's next steps amid ongoing economic concerns.
Fed Rate Decision: The Federal Reserve is widely anticipated to cut interest rates by 25bps, with markets watching closely for any shifts in forward guidance.

Recap

GBP retained its upward trajectory following the release of stronger wage growth figures, which pushed gilt yields higher. Market expectations for Bank of England rate cuts in 2025 have softened, with current pricing indicating just two 25bps reductions throughout the year.

Today’s Rates

Today's Interbank Rates at 09:39 am against GBP movement.

GBP>EUR – 1.2088

GBP>USD – 1.2688

EUR>GBP – 0.8269

EUR>USD – 1.0492

GBP>CAD – 1.8179

GBP>AUD – 2.0109

GBP>SEK – 13.906

GBP>AED – 4.6591

GBP>HKD – 9.8620

GBP>ZAR – 22.937

GBP>CHF – 1.1340

GBP>PLN – 5.1528

Today’s Key Takeaways

UK CPI figures matched expectations this morning, resulting in minimal impact on GBP and market rate cut pricing. GBP is slightly lower following yesterday's gains, with attention now shifting to tomorrow's BoE meeting.
Eurozone final CPI data is also due today, though it is expected to have limited market impact.
Focus later turns to the Fed meeting, where a 25bps rate cut is anticipated. The Fed may also revise next year’s rate cut projections, factoring in potential fiscal stimulus under President-elect Trump.
Unless the Fed surprises with a dovish tone, USD is likely to remain well-supported.

18th December 2024

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