EUR/USD appreciated 1.4% to 1.0566 after hitting the year’s low of 1.0418 last Friday. GBP/USD recovered to 1.2680 after failing to break below 1.25 in the past three sessions, DBS’ Senior FX Strategist Philip Wee notes.

BoE officials do not signal another cut in December

“European Central Bank board member Isabel Schnabel narrowed the gap with the Fed by pushing back dovish rate cut bets in the Eurozone. EU CPI inflation returned to the 2% target in October after a brief dip to 1.7% YoY in September, with core inflation remaining high at 2.7%.”

“Eurozone recession fears were not validated by GDP growth which improved to 0.4% QoQ sa in 3Q24 from 0.2% in 2Q24.” 

“GBP/USD recovered to 1.2680 after failing to break below 1.25 in the past three sessions. Bank of England officials did not signal another cut in December after its 25 bps cut to 4.75% on November 7.”