EUR experienced a very volatile day on Friday with EURUSD falling to two-year lows. GBPEUR hit 2024 highs again following a larger than expected fall in PMI activity in November, which also saw markets increase odds of a 0.50% European Central Bank (ECB) base rate cut in December.
GBP had a tough day as well following a lower than expected retail sales number and PMI numbers coming in lower than expected. US PMIs were higher than expected adding to the argument of better economic performance in the US.
*Daily move - against G10 rates at 7:30am, 25.11.24
** Indicative rates - interbank rates at 7:30am, 25.11.24
Over the weekend, Scott Bessent was picked as the next US Treasury Secretary by President-elect Donald Trump, seeing USD starting the week lower across the board. Bessent has been perceived by the market as a fiscal hawk, favouring lower deficits, lower inflation and a gradual approach to tariffs.
This is a shorter week stateside, with Thanksgiving on Thursday and early close for markets on Friday. Before then, we have the release of the Fed November FOMC minutes on Tuesday and the core PCE number on Wednesday.
EUR has recovered some of the lost ground from Friday versus USD and will need to see a higher consumer confidence number on Thursday and a higher CPI number on Friday if this recovery is to continue.
Very quiet on the UK front this week, thus not many catalysts to change GBP’s fortunes following the bout of negative data last Friday.
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