Conflicted Markets
GBP: The British Pound is looking at its first domestic test of the year as UK November GDP Data is released later this week. While broadly markets expect there to be flat growth, there are some who believe the outlook maybe stronger, supported by perceptions of a recovering manufacturing sector and resilient services. A positive GDP data release would lift the Pound, whilst weaker data could pressure it. Overall, markets look towards the GDP data this week to determine the momentum of the Pound.
EUR: The Euro continues to be dominated by geopolitical tensions in Greenland and the Russian Ukrainian war. The Euro decline was limited as the Euro stabilised near recent lows, supported by easing of external pressures. As a result of this, the Euro began the week firmer with many in the market focusing on geopolitics, upcoming inflation data and the corresponding thoughts of the ECB. Overall, the Euro remains reliant upon ECB confidence and contained inflation.
USD: The US Dollar started the week on the back foot after reports that Federal Reserve Chair Jerome Powell faces a Justice Department investigation, heightening fears over the central bank’s independence. Powell denied wrongdoing, calling the probe political. Investor confidence in the Dollar weakened, while attention now turns to upcoming inflation data, which could reinforce expectations of earlier interest rate cuts later this month for markets.
If you would like to discuss your exchange rates, have any questions about the market or would like to learn more about how we could help, please get in touch.
T: +44 203 440 7550 | E: info@spectrumfx.co.uk | W: www.spectrumfx.co.uk
