UK: Weekly FX Market Update 8 December

GBP

• GBPUSD pushed higher last week after positive Purchasing Managers Index data was released.

• However, the OECD forecasts a weak UK economy with high inflation and unemployment to come.

• UK GDP on Friday can give investors a view on where the UK economy is really going.

EUR

• Despite peace talks, the Russia/Ukraine conflict continues.

• Quarterly Eurozone GDP was upgraded from +0.2% to +0.3%, supporting EURUSD.

• ECB Economist Lane appeared sanguine about the effects of a stronger EURUSD on inflation.

USD

• Bloomberg analysts give a 92% chance of a rate cut from the Federal reserve this Wednesday.

• Will the FOMC cut rates but give a hawkish statement, bearing in mind CPI is still around 3%?

• Will weekly ADP employment data and Job openings on Tuesday show more weakness in the labour market and push the Fed to cut rates?

Main events for this week:

Mon Dec 8

09:30 EUR Sentix Investor Confidence

Tue Dec 9

13:15 USD ADP Weekly Employment Change

15:00 USD JOLTS Job Openings Data

Wed Dec 10

14:45 CAD Bank of Canada Interest Rate Decision

19:00 USD FOMC Interest Rate Decision

19:30 USD Fed Chair Powell Press Conference

Thu Dec 11

13:30 USD Unemployment Claims

13:30 USD Producer Price Index

Fri Dec 12

07:00 GBP GDP