Economic Update
Stay informed about the latest economic developments in the UK, Eurozone and the US. Get insights into key indicators and currency trends in this comprehensive economic update blog.
GBP is on the up
6 minute read04 December 2023
GBP
GBP made strong gains against the euro and US dollar last week but receded at the beginning of Monday’s trading session.
For GBP/EUR and GBP/USD, last week was one of the most impressive weeks for sterling this year, with GBP/EUR climbing 1.5 cents and GBP/USD up 1.2 cents.
This takes GBP/EUR to within 1 cent of its best rate this year, which topped 1.1780 during the summer. GBP/USD still has a way to climb as this breached 1.30 over the same period and is well below the medium-term historical average of around 1.40 in prior years.
EUR
German and total EU inflation dropped further than expected last week. German CPI fell more than the expected 3.5%, landing at 3.2%, from 3.8% last month. CPI inflation in the whole European Union followed a similar path, dropping to 2.4% from 2.9% from October to November. While this could be positive for the European economy and may help it grow, the reduced inflation can cause currency weakness.
Thursday will see the latest data released for the EU’s GDP, which markets anticipate will remain unchanged from the current +0.1% forecast for Q3.
The euro performed well last week, with EUR/USD reaching over 1.10 at its peak for the first time since August. Levels have since fallen to more rangebound territory of around 1.09 – however, this could suggest there is more to come from the single currency. Part of the USD weakness last week could be attributed to the ISM Manufacturing PMI data, which was expecting a 1-point jump from 46.7 to 47.6 but came in unchanged on Friday. Any reading below 50 indicates that business conditions are dropping. Many developed countries have experienced readings earlier this year in the low 40s, so levels are still moving back towards growth, but it may take some time to fully recover in 2024. Friday could be a particularly volatile day for the USD this week, with a string of data due to be released. Average hourly earnings, nonfarm payrolls and the Michigan Consumer Sentiment report all make an appearance, with the general market forecasts expecting positivity. The markets expect payroll data to show an additional 30k new jobs climbing from 150k last month to 180k, while the Sentiment Index is expected to improve from 61.3 to 62. Australian GDP and the Reserve Bank of Australia’s interest rate decision are happening this week. Markets expect the RBA to hold rates at 4.35% during its rate meeting tomorrow, as inflation has remained low. GDP is also expected to remain unchanged at 0.4% for Q3 when it is released on Wednesday. This may not cause much change for the AUD value unless data deviates from expectations. GBP/AUD has remained in a similar position the last few weeks, floating around the 1.90 level, which could reflect the lack of surprising data that may have caused a shift in market predictions. Canadian GDP fell considerably more than expected last week. Growth fell from 1.4% to -1.1%, which was more than 1% below expectation. The news caused the Canadian dollar to weaken against the pound to 1.7270, which was within touching distance of the two-year high of 1.7314, which it briefly touched in July this year. Rates may have climbed higher, but the pound hasn’t been able to take advantage of the CAD weakness since its GDP output is also very sluggish. Employment levels in Canada also improved by 25k in its latest reading on Friday, although total unemployment increased marginally from 5.7% to 5.8%. USD
AUD/NZD
CAD
This commentary does not constitute financial advice and all quoted rates are sourced from Bloomberg.
Whatever your payment needs are, we've got you covered
Regulatory info | Terms of use | Privacy Policy | Cookie Policy | Accessibility | Modern Slavery Act | Security | Open Banking | Sitemap
None of the information contained in this website constitutes, nor should be construed as financial advice.
Indicative rates are displayed on our website. We use interbank rates as a reference, and these rates should only be used as a guide.
Moneycorp is a trading name of TTT Moneycorp Limited, a company registered in England under registration number 738837. Its registered office address is at Floor 5, Zig Zag Building, 70 Victoria Street, London SW1E 6SQ and it is VAT registration number is 897 3934 54. TTT Moneycorp Limited is authorised by the Financial Conduct Authority under the Payment Service Regulation 2017 (firm reference number 308919) for the provision of payment services.
Moneycorp FRM is a trading name of Moneycorp Financial Risk Management Limited which is authorised and regulated by the Financial Conduct Authority for the provision of designated investment business (firm reference number 452443).
Travel money services are provided by Moneycorp CFX Limited. Moneycorp CFX limited is a company registered in England under registration number 4780562. It is registered office address is at Floor 5, Zig Zag Building , 70 Victoria Street, London, SW1E 6SQ and its VAT registration number is 897 393454.
Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated. Explorer™️ Card is issued by Prepay Technologies Ltd (PPS), with its registered office at Floor 6, 3 Sheldon Square, London W2 6HY UK. PPS is authorised and regulated by the UK Financial Conduct Authority for the issuance of e-money with firm reference number 900010.
© Copyright 2025 moneycorp