ChamberFX Weekly Brief
Keep up-to-date on foreign exchange developments and news with our ChamberFX weekly briefs and monthly newsletters. These valuable insights are provided by Damon Ellam, International Payments UK, MoneyCorp. Damon is our regional representative and will be providing useful monthly FX forecasts to help chamber members with their currency strategies.
DECEMBER 2024
"Welcome to my December newsletter.
I hope you find it useful and informative.
Following Trump’s victory in the US election in November, financial markets reacted strongly, albeit roughly in line with expectations. The US dollar index strengthened by 4.5% before a smaller 2% correction. This move pushed GBP/USD as low as 1.25 before recovering to around 1.2750 last week, and EUR/USD reached a floor of 1.0335 – a two-year low.
This month, several risk events could set the direction going into next year:
- This week: There is a significant risk that the French government could collapse due to pressure from opposition parties, weakening the euro today.
- Next week (12th December): The European Central Bank is likely to cut their key deposit rate to 3.00% or 2.75%. A cut to 2.75% would pose another significant risk for the euro.
- The following week (18th December): The US Federal Reserve will meet. There is currently a 65% chance they will cut interest rates again, which could significantly move USD markets.
- Followed by (19th December): The Bank of England will meet for the final time this year. They are unlikely to cut interest rates this time but may pave the way for further cuts next year in their comments.
Looking ahead to 2025, we lack the blockbuster events that we had this year. The snap German federal election on Sunday, 23rd February, and the overriding narrative that the EU is becoming increasingly destabilised, will impact the euro over the coming months. However, outside of the normal cycle of economic data and central bank meetings, there are no other key dates to point to next year (at the moment!).
This could provide some refreshing certainty over general political and economic direction, but also leaves the door open for more unpredictable geopolitical and economic events to impact FX markets. Notably, with Trump being inaugurated in January, the unpredictability of his presidency could replace forecastable risk events with unforeseen announcements which shock financial markets.
Planning ahead is key to smoothing out the unpredictable periods for your business. Please let me know if I can help with your FX & payments strategy as part of that planning process.
Have a great festive period!
All the best,
Damon."
Weekly FX Briefs
Contact
For further information and advice on Hull & Humber's ChamberFX, or for assistance with your currency strategy, please click here or contact Lorraine Holt at l.holt@hull-humber-chamber.co.uk or call 01482 324976.
Service delivered by Hull & Humber Chamber of Commerce in partnership with TTT Moneycorp Limited.
TTT Moneycorp Limited is authorised by the Financial Conduct Authority under the Payment Service Regulations 2017 (reference number 308919) for the provision of payment services.
