Thursday 19th December
The pound (GBP) weakened following the Bank of England’s (BoE) final interest rate announcement for 2024. While the bank maintained its current policy stance, as anticipated, three policymakers voted in favor of reducing rates. The BoE also highlighted concerns about stagflation and revised its growth projections downward.
The euro (EUR) remained under pressure as the US dollar’s (USD) continued strength overshadowed any support for the common currency. Although Germany’s consumer confidence index showed an unexpected improvement, the data failed to lift EUR sentiment, with pessimism still prevalent among consumers in Europe’s largest economy.
The US dollar hit multi-year highs after the Federal Reserve’s decision but saw some of those gains pared back yesterday as investors took profits. Even so, an upward adjustment to third-quarter GDP figures, which revealed a 3.1% expansion in the US economy, helped the dollar retain its footing.
Wednesday 18th December
The pound (GBP) traded within a narrow range on Wednesday, as investors appeared largely unmoved by a significant surge in UK inflation. The data quelled any remaining speculation about an imminent Bank of England (BoE) rate cut, but concerns persisted about how entrenched price pressures might weigh on the UK’s economic prospects.
The euro (EUR) faced early weakness on Wednesday after a downward revision to Eurozone inflation figures for November. Later in the day, the single currency saw sharper declines due to its strong inverse relationship with the strengthening US dollar (USD).
The US dollar gained ground on Wednesday following the Federal Reserve’s latest interest rate decision. While the expected 25-basis-point rate cut had already been factored in by markets, the Fed’s hawkish outlook provided additional support for the dollar, driving demand higher.
Tuesday 17th December
The pound (GBP) edged higher as accelerating UK wage growth reduced expectations of a Bank of England (BoE) interest rate cut. Earnings growth in the UK rose from 4.9% to 5.2% in the three months to October, surpassing forecasts of 5%. The figures may heighten concerns among BoE policymakers about the persistence of inflationary pressures.
The euro (EUR) struggled early in the session, weighed down by its inverse relationship with a stronger US dollar (USD). Later in the day, the single currency rebounded following an unexpected uptick in Germany’s economic sentiment index, which offered some support.
The US dollar experienced mixed movement yesterday, gaining against weaker peers amid a cautious market atmosphere and better-than-expected US retail sales data. However, a dip in US Treasury yields ahead of the Federal Reserve’s interest rate decision capped the dollar’s potential for further gains.
Monday 16th December
The pound (GBP) gained momentum as the UK’s preliminary services PMI for December surpassed expectations, showing an unexpected uptick in activity. The report also pointed to lingering inflationary pressures in the services sector, prompting markets to scale back expectations of a Bank of England (BoE) rate cut.
The euro (EUR) experienced mixed performance following the release of its December PMI figures. While the Eurozone services sector unexpectedly returned to growth, the broader private sector continued to shrink, keeping optimism in check.
The US dollar (USD) had an unsteady start to the week, with mixed PMI data and fluctuating market sentiment causing uncertainty. Additionally, traders appeared cautious, avoiding strong moves on the dollar ahead of the Federal Reserve’s upcoming interest rate decision.
Friday 13th December
The pound (GBP) faced heavy selling pressure at the end of last week after the release of the latest UK GDP figures. The unexpected contraction in economic activity at the start of the fourth quarter took markets by surprise, raising fresh concerns about the UK’s economic prospects.
The euro (EUR) saw broad gains on Friday, supported by its inverse relationship with the US dollar (USD), which softened during the session. Further boosting the euro’s position was stronger-than-anticipated industrial production data from the Eurozone.
The US dollar (USD) weakened as a positive market sentiment dominated the European trading session, reducing demand for safe-haven assets. However, a slight rise in US Treasury yields helped limit the dollar’s decline as the week drew to a close.
Thursday 12th December
The pound (GBP) faced renewed pressure yesterday as the absence of fresh UK economic data left investors with little reason to support the currency. This allowed concerns over the UK’s economic outlook to resurface, resulting in losses for the pound.
The euro (EUR) experienced significant fluctuations as markets reacted to the European Central Bank’s (ECB) final interest rate decision of 2024. As anticipated, the ECB cut rates by 25 basis points and hinted at the possibility of further reductions in the coming year. Despite this, the euro traded within a wide range, managing to strengthen against some of its weaker counterparts.
The US dollar (USD) strengthened on Thursday after the release of the US producer price index for November, which came in higher than expected. The data pointed to ongoing inflationary pressures, reinforcing concerns raised by the previous day’s rise in consumer price inflation. As a result, market expectations for Federal Reserve rate cuts were scaled back, providing additional support for the dollar.
Wednesday 11th December
The pound (GBP) saw little movement on Wednesday, with the absence of fresh UK economic data leaving investors without clear direction. Ongoing concerns about the UK’s recent sluggish economic performance further weighed on sentiment, limiting demand for the currency.
The euro (EUR) remained steady as traders awaited the European Central Bank’s (ECB) final interest rate decision of the year. While markets widely anticipate a rate cut, uncertainty around the ECB’s future policy outlook kept euro investors cautious throughout the session.
The US dollar (USD) climbed on Wednesday following the release of the latest US consumer price index, which revealed inflation had risen to a four-month high in November. The data prompted some investors to adjust their outlook for Federal Reserve rate cuts in early 2025, providing support for the dollar.
Tuesday 10th December
The pound (GBP) posted gains against weaker currencies on Thursday and recorded only modest declines elsewhere, despite the absence of fresh UK economic data. Market sentiment appeared to improve following the launch of the UK Chancellor Rachel Reeves’ spending review, which included commitments to reduce waste and strengthen partnerships with the private sector.
The euro (EUR) slipped as investors grew cautious ahead of the European Central Bank’s (ECB) upcoming interest rate decision. The euro also faced additional pressure from its strong inverse relationship with the US dollar (USD), which strengthened during the session.
The US dollar (USD) advanced on Thursday, supported by a rise in US Treasury yields. Reduced risk appetite among investors further boosted demand for the dollar as a safe-haven asset.
Monday 9th December
The pound (GBP) delivered a mixed performance on Thursday as the absence of UK economic data left investors without a clear catalyst for movement. The pound gained ground against safer currencies but lost momentum against riskier counterparts.
The euro (EUR) weakened against stronger rivals amid a shift toward riskier assets. However, the euro found some support from its inverse relationship with the US dollar (USD), which softened during the session.
The US dollar (USD) faced headwinds on Thursday as a shift in market sentiment toward riskier assets reduced demand for safe-haven currencies. The dollar was further pressured by an uptick in market expectations for a 25bps interest rate cut from the Federal Reserve this month.
Friday 6th December
The pound (GBP) gained ground against its weaker counterparts, unaffected by remarks from Bank of England (BoE) policymaker Swati Dhingra. Dhingra, in a Bloomberg interview, called for further interest rate cuts, but her well-known stance on easing rates did not have a negative impact on the pound.
Meanwhile, the euro (EUR) struggled against stronger currencies after Germany’s industrial production unexpectedly contracted in October. Despite this, the euro managed to make gains against some of its more vulnerable peers.
The US dollar (USD) saw an increase on Friday, despite some initial fluctuations, following the release of the latest US labour market data. While the unemployment rate rose as expected, the stronger-than-anticipated non-farm payrolls report provided a boost to the USD.
Thursday 5th December
On Thursday, the pound (GBP) strengthened against several of its counterparts, despite the absence of new UK economic data. Sterling appeared to benefit from expectations that the Bank of England (BoE) might take a more cautious approach to interest rate cuts compared to other central banks.
The euro (EUR) also rose, overcoming political concerns in France and some disappointing economic data from the Eurozone. The common currency seemed to benefit from its negative correlation with the struggling US dollar (USD), which faced pressure during the day.
The US dollar, traditionally seen as a safe haven, lost ground as improved market sentiment reduced demand for the currency. Additionally, the latest initial jobless claims data weighed on the USD, with the number of claims hitting a six-week high.
Wednesday 4th December
The pound (GBP) remained within a narrow range, bolstered by an upward revision to the UK’s services PMI, which indicated that the private sector avoided contraction last month. However, Sterling’s gains were limited after Bank of England (BoE) Governor Andrew Bailey forecasted up to four interest rate cuts in 2025 as inflationary pressures begin to ease.
The euro (EUR) faced challenges after dovish comments from European Central Bank (ECB) policymaker Olli Rehn. Rehn suggested there was “justification for a December rate cut” and hinted that additional policy easing could occur in 2024.
The US dollar (USD) encountered difficulties on Wednesday, pressured by a series of disappointing economic reports from the US. November’s ISM services PMI revealed a sharper-than-anticipated slowdown in the services sector, while ADP employment figures fell short of expectations.
Tuesday 3rd December
On Tuesday, the pound (GBP) remained largely steady, with limited movement due to ongoing concerns about the UK’s economic prospects. These concerns were further heightened by the British Retail Consortium’s (BRC) latest retail sales data, which suggested a possible slowdown in consumer spending during November.
The euro (EUR) struggled on Tuesday, weighed down by political uncertainty in France. The looming no-confidence vote against Prime Minister Michel Barnier sparked fears of potential instability in the Eurozone’s second-largest economy.
The US dollar (USD) initially faced pressure on Tuesday as a more cautious market sentiment reduced demand for the safe-haven currency. However, the dollar recovered after US job openings data for October came in stronger than expected, signaling a more resilient labour market.
Monday 2nd December
The pound (GBP) came under pressure after the UK’s final manufacturing PMI was revised downward, indicating a more significant contraction in activity. Despite this, Sterling remained relatively stable against some of its weaker counterparts.
The euro (EUR) weakened as political unrest in France, the Eurozone’s second-largest economy, impacted the common currency. French Prime Minister Michel Barnier invoked special constitutional powers to push his controversial budget through the deeply divided National Assembly, setting the stage for a no-confidence vote.
The US dollar (USD) surged at the start of the week following new tariff threats from President-Elect Donald Trump over the weekend. In a post on his social media platform, Truth Social, Trump warned he would impose 100% tariffs on BRICS nations if they attempted to undermine the US dollar by creating a competing global reserve currency.
Currency Ranges for the month:
GBP/USD: Low: High:
GBP/EUR: Low: High:
EUR/USD: Low: High: