06/12/2024
Written by: Ian Morley
GBPEUR
Summary
The Pound remained under pressure against the Euro following mixed UK labour market data. While wage growth showed resilience, the unemployment rate climbed to 4.3%, the highest level in nearly two years. Meanwhile, the Euro was supported by expectations of cautious ECB policy despite ongoing concerns about weak growth in the Eurozone.
Outlook
Markets will focus on UK GDP figures due Friday, which could influence sentiment regarding the BoE’s policy direction. For the Euro, Thursday’s pan-EU GDP update will likely provide further clarity on economic momentum in the region. GBPEUR could remain range-bound, with downside risks if UK data disappoints.
EURUSD
Summary
EURUSD hit fresh 2024 lows near 1.0600 as the Euro struggled against a robust Dollar. The Greenback continued to benefit from higher Treasury yields and market optimism about Trump’s fiscal policies. German political uncertainty added further pressure to the Euro.
Outlook
The focus will shift to Thursday’s pan-European GDP figures and today’s US inflation data. A higher-than-expected US CPI reading could push EURUSD below 1.0600. If EU growth data signals continued stagnation, the pair may remain under pressure.
GBPUSD
Summary
GBPUSD fell to a three-month low around 1.2750, driven by mixed UK employment data and a strengthening Dollar. While UK wage growth remained sticky, rising unemployment raised concerns about economic resilience. The Dollar gained further on expectations that Trump’s policies might increase inflationary pressures, reducing the likelihood of imminent Fed rate cuts.
Outlook
Today’s US CPI report will be critical for GBPUSD’s direction. A stronger-than-expected reading could trigger additional Dollar strength, driving the pair below 1.2700. UK GDP figures later in the week will also be pivotal in determining whether the Pound can regain footing.
AUDUSD
Summary
The Australian Dollar weakened further, trading near a three-month low at 0.6530. Softer-than-expected wage growth and lingering concerns about China’s economic slowdown weighed on the currency. Meanwhile, the USD remained buoyant as markets positioned for Trump’s proposed tariffs and fiscal policies.
Outlook
AUDUSD could face further downside if today’s US inflation data supports a stronger Dollar. Australian employment figures due later this week may provide some support, but the pair’s performance will largely depend on external factors, including China’s economic outlook.
Final Summary
Currency markets remain focused on key economic data and geopolitical developments. Today’s US inflation data will be pivotal, particularly for pairs involving the Dollar. Meanwhile, upcoming GDP figures for the UK and Eurozone are expected to drive further volatility in the Pound and Euro. Stay vigilant for potential sharp market moves.