As we near the final month of 2023, investors rejoice as the UK is yet to slip into a “technical recession”, however, a lot can happen in a month.
November has been a mixed bag for data releases, especially for the US dollar, but more on that below.
In this article, we’ll look at the pound, US dollar and euro’s performance this month against their major rivals, before outlining dates of potentially market-moving economic and political releases in December that could affect what your pound is worth (aka your currency risk).
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GBP/EUR: High inflation remains pressing
Despite making gains since Jeremy Hunt’s Autumn Statement on Wednesday, the pound is trading close to 0.4% lower than this time last month. The pound fell to fresh six-month lows in mid-November following comments that inflation remains too high, which discouraged expectations that interest rates could be trimmed as early as next summer.
The Bank of England chose to keep interest rates unchanged at 5.25% and economists forecast it will remain at that rate in the Bank’s December meeting on Thursday 14th December.
GBP/USD: Stellar gains for the pound
There’s been a lot of economic data at play in November resulting in over 2% of gains for the pound against the US dollar. Sterling’s gains have been steadily increasing throughout the month, and despite taking a tumble in the first week of November following interest rate releases, the pound remains on good form as December approaches.
The Federal Reserve also chose to keep rates unchanged in its November meeting. The current US interest rate is 5.5% and economists have priced in a 25-basis point rise for the December rate.
USD/EUR: US dollar on the back foot
Like the pound, the euro benefitted from an amalgamation of US data releases that missed the mark, surging a whopping 2.5% since this time last month. The releases of note that caused the dollar to slip included the ISM services PMI, which fell to a five-month low, the US unemployment rate increased and business confidence fell.
Upcoming data releases in December
The economic and political data releases of note to keep an eye on in December.
(Date format: DD/MM)
GBP:
- 12/12 UK unemployment rate (Oct)
- 13/12 GDP (Oct)
- 14/12 BoE Interest rate decision
- 20/12 UK Inflation rate (Nov)
- 22/12 UK Retail sales (Nov)
EUR:
- 04/12 Germany’s Balance of trade (Oct)
- 12/12 Germany’s Economic Sentiment Index (Dec)
- 14/12 ECB Interest rate decision
USD:
- 05/12 JOLTs Job openings (Oct)
- 08/12 Non-farm payrolls (Nov)
- 08/12 US unemployment rate (Nov)
- 08/12 Michigan Consumer Sentiment (Dec)
- 12/12 Core inflation (Nov)
- 12/12 Inflation rate (Nov)
- 13/12 Federal Reserve Interest rate decision
- 14/12 US retail sales (Nov)
- 22/12 Core PCE price index (Nov)
- 22/12 Durable goods orders (Nov)
- 22/12 Personal spending (Nov)
- 22/12 Personal income (Nov)
If you have a large transaction coming up and are concerned about how external factors could affect your budget, speak to your trader today to discuss your currency requirements.
