Advanced filters
Job Role:
Content Type:
Job Role:
Content Type:

UK: Weekly FX Market Update 5 December

CalendarDecember 5, 2022
  • GBPUSD had a positive week gaining 1.5%.

  • Sterling strengthened following Bank of England Economist Pill and his hawkish comments about ‘doing more’ on interest rates in coming meetings.

  • Non-Farm Payroll on Friday was bullish, allowing the USD to claw back some lost ground.

  • This week the main economic highlights will be Services Purchasing Managers Index (PMI) released today (Monday) and Consumer Inflation Expectations on Friday.

  • With the US economy still growing strongly, can Sterling continue its bounce from the September low at 1.0360?

  • The Single Currency had a good week against the US$, strengthening by 1.4%.

  • ECB President Lagarde continued her commitment to reducing inflation.

  • Eurozone CPI was released lower than expected at 10%.

  • Economic data releases include Retail Sales released today (Monday) & Revised GDP (Tuesday).

  • Can the Euro continue its recent gains against the US$?

  • ECB President Lagarde speaks twice this week. Will she continue her hawkish mantra?

  • US GDP was better than last month’s +2.6% gain, showing a 2.9% growth rate.

  • However, the Dollar weakened due to Fed Chair Powell saying that the time for moderating the pace of rate hikes may come as soon as December.

  • Non-Farm Payrolls data showed a tight US labour market. The headline release showed 263k new jobs were added in November, with average hourly earnings growing 5.1% on an annual basis against last month’s 4.6% rate.

  • This week the market will consider what the strong jobs report means for US interest rates and looks ahead to the release of the Producer Price Index on Friday.

  • Could the Fed be forced to hike rates more aggressively than previously thought and could this encourage more US$ buying?

  • China’s zero-tolerance covid policy has been attracting huge negative sentiment as the Chinese population demonstrate against it and criticize Premier Xi’s policy.

  • There is some evidence that covid restrictions are being relaxed.

  • The market has started to trade in a ‘risk on’ manner at times. Could this continue?

Events for the weekend ahead:

Mon Dec 5

01:45 EUR ECB President Lagarde speaks

09:30 GBP Final Services PMI

10:00 EUR Retail sales

15:00 USD ISM Services PMI

Tue Dec 6

03:30 AUD Cash rate Decision/RBA Statement

Wed Dec 7

00:30 AUD GDP QoQ

10:00 EUR Revised GDP QoQ

15:00 CAD Bank of Canada Interest Rate Decision

Thu Dec 8

00:30 AUD RBA Bulletin

12:00 EUR ECB President Lagarde Speaks

Fri Dec 9

09:30 GBP Consumer Inflation Expectations

13:30 USD PPI

15:00 USD Preliminary UoM Consumer Sentiment


Trevor Charsley

Trevor Charsley

Senior Market Strategist

Trevor has over 25 years' trading and sales experience. He produces regular market and technical analysis as well as help with the structure and management of FX hedging policies. Trevor is often listed among the top "currency forecaster on Bloomberg".