November was a very volatile month mainly due to the U.S. presidential election and issues in the German government, we saw some big moves in FX, we have GBPEUR at 1.20, EURUSD at 1.05 (Down from 1.10) and GBPUSD at 1.27 (Down from 1.32)- the longevity of these moves are definitely up for debate, but there are some events to focus on in December which may give us some volatility before the end of the year- the main three are the Central Bank rate decisions from Boe (Dec 18th), ECB (DEC 12th) and the Fed (Dec 18th). currently, the markets are pricing in that the ECB & Fed will cut by 25bps, and the BoE may keep rates on hold, but this could be subject to change depending on any UK data releases before the meeting. If the BoE manages to keep rates on hold we could see Sterling continue it’s strength against the Euro, and potentially gain some ground against the Dollar if the Fed decides to continue their cutting cycle at the same time.
Looking at this week, we have a few noteworthy data releases to kick off December, on Monday we have UK, EU & U.S. global manufacturing PMI which is expected stronger for the U.S and weaker for the UK, so this could affect GBPEUR and GBPUSD exchange rates if the data comes out a little more exaggerated. We also have a speech from ECB President Lagarde and any talk about this month’s cut could potentially affect the Euro, any negative talk will see EURUSD go lower again.
On Wednesday we have Composite PMI (Composite is essentially the weighted average of PMI’s for both manufacturing and service sectors) for UK, EU & U.S, this will be followed by a speech from Fed Chair Powell, similarly to Lagarde’s speech, any talk of rate cuts in December may begin to weaken the Dollar before the meeting itself, but I feel he may not say too much as this speech is before Friday’s jobs data.
Thursday & Friday are centered around U.S jobs with jobless claims on Thursday, and Friday being the last NFP release of 2024. as November’s number was so low, we are expecting a higher number for NFP’s this month, expectation is 183k. If we see a lower number than this then this will be negative for the USD and will set pace for a higher GBPUSD rate by the end of the month- a higher number will fuel a down move in Cable prices.
GBP/EUR 1.2069 GBP/USD 1.2691 GBP/AED 4.6643
GBP/AUD 1.9539 GBP/CHF 1.1239 GBP/CAD 1.7813
GBP/NZD 2.1502 EUR/USD 1.0505 GBP/ZAR 23.0040