Spectrum Daily Report

GBP: The British Pound strengthened yesterday, supported by remarks from Bank of England Deputy Governor Clare Lombardelli. In an interview with the Financial Times, Lombardelli highlighted ongoing inflationary pressures in the service sector, which reduced expectations for a rate cut by the BoE in December. Looking ahead, with no major UK data scheduled for release today, the Pound may face challenges in sustaining its momentum.

EUR: The Euro has been trading in mixed fashion this week and has remained relatively immune to the political instability in France, where the government faces opposition over a contentious budget. Despite rising market concerns, the Euro has not been significantly impacted, mainly due to the U.S. Dollar’s recent drop in global FX. However, if French political risks escalate, it could start to affect the Euro, particularly if the French government collapses.

USD: The U.S. Dollar slid over the past couple of days but is expected to remain strong as we approach the end of 2024. Despite recent fluctuations, including a 6% drop in the Pound-Dollar exchange rate as well as a 7.5% drop in the Euro-Dollar exchange rate, the Dollar steadied, staying near two-year highs. Ultimately, U.S. economic growth and persistent inflation pressures suggest limited room for rate cuts, further bolstering the Dollar’s strength.

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