UK: Weekly FX Market Update 25 November 2024

GBP

• GBPUSD ended weaker on the week after we saw a sharp fall in UK retail sales and the UK purchasing managers index highlighted a possible economic slowdown.

• Bloomberg is now forecasting that the Bank of England will cut rates by 0.75% for 2025.

• With a lack of UK data releases this week, will sterling be moved by US data and a possible escalation of hostility between Russia and Ukraine?

EUR

• The Eurozone purchasing managers index data also disappointed.

• Bloomberg now expects the European Central Bank to cut rates by 1.50% for 2025.

• With markets giving a 50% chance of a 0.50% rate cut in December, and the US economy still outperforming, will we see EURUSD trade at 1.0000 soon?

USD

• Expectations for quicker and larger rate cuts from the UK and Eurozone are supporting the US Dollar.

• Escalating hostilities between Russia and Ukraine may also be encouraging investors to buy ‘safe haven’ US Dollars.

• Will US GDP and the FOMC meeting minutes released on Wednesday give the US Dollar another leg up this week?

Main events for this week:

Mon Nov 25

09:00 EUR German IFO Business Climate

Tue Nov 26

15:00 USD Consumer Confidence

19:00 USD FOMC Meeting Minutes

Wed Nov 27

00:30 AUD CPI

01:00 NZD RBNZ Official Cash Rate

13:30 USD Preliminary GDP/Unemployment Claims

15:00 USD Core Personal Consumption Expenditure Index

Thu Nov 28

All Day US Thanksgiving Holiday

07:00 EUR German preliminary CPI

Fri Nov 29

10:00 EUR CPI Flash Estimate

14:45 USD Chicago PMI