This morning The Euro has continued to be under pressure ahead of the no-confidence vote against the French Prime Minister Michel Barnier. Lawmakers are set to begin debating the social security element of the budget in Paris at 4pm, with the actual voting to commence shortly afterwards. Current sentiment is pointing towards Barnier losing the vote, after he used a constitutional clause to force through his budget without putting it through a vote.
Further political turmoil off the back of Barnier losing would weigh even heavier on The Euro when considering the struggles that both France and Germany are currently experiencing and therefore, we can expect to see more downward pressure against both USD & GBP. A loss in the no-confidence vote would also potentially lead to France essentially having a caretaker administration in place until July when the next set of elections are due to take hold.
Earlier this morning we’ve also seen The Australian Dollar weaken after softer than expected Gross Domestic Product data has spiked bets that The Reserve Bank of Australia will cut interest rates sooner than forecasted in 2025. Their third quarter figures grew by 0.8%, which was marginally off their target of 1.1%, and more importantly showing an actual decline from the 1% growth seen in the second quarter. The main contributing factor to this was weak private spending, with consumer appetite hit hard due to sticky inflation and high mortgage rates.
Moving into this afternoon, focus switches to jobs data in The US with the monthly release of ADP Employment Change figures. This release measures the employment change within the private sector in The US and generally gives us an insight into how Non-Farm Payrolls will play out on Friday of this week. A healthy jobs report for both sectors usually helps strengthen The US Dollar as it should see inflationary pressures rise and as a result give The Federal Reserve more ammunition towards rate increases. The releases this week are expected to be a mixed bag, with ADP Employment showing a drop, whilst Non-Farm set to show a huge increase. As ever, both data releases are highly volatile and will no doubt weigh heavily on The Dollar.
GBP/EUR 1.2047 GBP/USD 1.2641 GBP/AED 4.6455
GBP/AUD 1.9706 GBP/CHF 1.1222 GBP/CAD 1.7803
GBP/NZD 2.1652 EUR/USD 1.0482 GBP/ZAR 22.9726