GBP generally underperformed yesterday, continuing the fall from Friday ahead of tomorrow's CPI numbers. JPY was the biggest faller in the G10 after Bank of Japan (BoJ) Governor Kazuo Ueda remained neutral on the Bank's stance on hiking interest rates further.
EUR got a boost yesterday following some hawkish comments from European Central Bank (ECB) member Joachim Nagel that any trade wars would be inflationary and thus would call for higher interest rates.
*Daily move - against G10 rates at 7:30am, 19.11.24
** Indicative rates - interbank rates at 7:30am, 19.11.24
EUR remains in focus today with October's final CPI print at 10am and then in the afternoon we focus on Canada’s CPI number, which could see rate expectations shift to either a 25bps cut or 50bps cut in December.
For GBP clients, focus remains on tomorrow's CPI numbers and what this means for the chances for a December rate cut. Given we are seeing some USD consolidation this week, we feel that if CPI numbers surprise to the upside and we witness an uptick in GBP, clients should use that opportunity to hedge their future USD needs as the longer term outlook continues to favour the greenback.
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