Published: 04/12/2024 By ECAP
The British Pound received some level of support as house price growth accelerated unexpectedly in November, reaching a two-year high. In fact, despite high interest rates and a squeeze on household budgets, strong income growth continued to drive demand for housing. This positive economic data boosted the Pound, signaling resilience in the UK economy. Additionally, if the Bank of England signals no immediate rate cuts, the Pound could strengthen further.The Euro faces pressure against its peers due to political instability in France, as Prime Minister Michel Barnier's no-confidence vote looms. Moreover, Barnier’s potential resignation could trigger more uncertainty, affecting France's finances and raising debt costs. Despite this, the European Central Bank’s backing may prevent further Euro declines. While the Euro's outlook remains uncertain, it could recover if political turmoil eases and fiscal consolidation is achieved in France.
The U.S. Dollar remains broadly positive, supported by President-elect Trump’s threat of 100% tariffs on BRICS countries, pushing back against moves to rival the Dollar. Looking forward, investors will be focused on US private employment and Services PMI data, which could influence expectations for the Federal Reserve's rate decisions. Ultimately, the Dollar Index remains stable, with markets awaiting further guidance from the Fed's Beige Book and Chair Jerome Powell's speech.
Data supplied by GC Partners