Last week was a pretty volatile week from a Sterling and Dollar perspective- with both central banks having their interest rate decision within 24 hours of each other. The Fed decided to cut 25bps but hold off on any further cuts over the new few months, which strengthened the US Dollar- while the BoE decided to keep rates on hold due to rising inflation, with the view to cut rates in February 2025- this sent Sterling a lot lower- and the final blow was weak UK retail sales on Friday, which sent GBPUSD to 1.25- while GBPEUR holds on to 1.20 and EURUSD trades at 1.04.
This week we have some data releases before Christmas, and then we will see liquidity dry up until January 2nd- just to note, we are open on Christmas Eve, the 27th December, the 30th December and the 31st- an returning to the office 2nd January 2025- my advice would be please get any payments done on Monday that are urgent, as banks will be moving slower after Christmas eve.
On Monday we have UK GDP data, and the expectation is that we see 0.1% growth for the quarter, I do think there is a risk this is revised down to only 0%- and if this is the case then we will see Sterling weaken off before the holidays begin, if we do manage to see the expected 0.1%, it is still bad news but somewhat expected so I don’t expect a sell-off in that occurrence.
On Tuesday we have U.S durable goods orders alongside new home sales, both expected higher which is positive for the U.S economy, there isn’t any other data of note on Christmas eve and the market will close early so I do not expect much volatility on this day.
As mentioned this is a quiet week on the market, and will be my last report until January, I will take this opportunity to wish you all a Merry Christmas and a Happy New Year and hope you enjoy the time with loved ones.
See you in 2025!
GBP/EUR 1.2062 GBP/USD 1.2565 GBP/AED 4.6171
GBP/AUD 2.0072 GBP/CHF 1.1243 GBP/CAD 1.8064
GBP/NZD 2.2207 EUR/USD 1.0403 GBP/ZAR 23.1328