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Eurozone unemployment fell in November. Editorial credit: Igor Plotnikov via Shutterstock
The US dollar pared back some of Monday’s losses in yesterday’s trading, gaining ground over the pound and the euro.
EUR/USD fell by a third of a per cent, while GBP/USD declined by a similar margin. GBP/EUR was little changed for the second day on the spin.
That came despite a decline in the eurozone’s unemployment rate, which fell slightly to 6.4% in November compared to 6.5% in October. Separate Italian unemployment figures also fell month-on-month, although Italy still has one of the region’s highest rates of joblessness.
Currency markets (and indeed broader markets) continue to jump around to position themselves for interest rate cuts from central banks. According to analysts at JPMorgan, the most popular bets for the Federal Reserve’s first cut are March, May and June, although March’s window appears to be shrinking fast.
US stock indexes began Tuesday down as the impact of crisis in the Middle East continued to cause jitters. Both the Brent Crude oil index and its American counterpart West Texas Intermediate added over two per cent, a sign that recent geopolitical tensions are keeping markets guessing.
Barclays and Santander have followed HSBC and Halifax in offering cheaper mortgage products to UK borrowers. Existing customers looking to remortgage can now access a two-year fix starting from 3.85 per cent, while five-year deals start at 3.74 per cent.
The global economy is now on track for its worst half-decade of growth for the past 30 years, according to the World Bank. The organisation said gross domestic product in the world economy was set to expand just 2.4 per cent in 2024 — down from 2.6 per cent last year – as the impact of war and elevated borrowing costs hit hard.
For a further look at global growth figures, as well as to read currency predictions for 2024 from leading banks, be sure to keep an eye out for our upcoming Quarterly Forecast.
The scandal at the UK post office rumbled on yesterday, as former boss Paula Vennells decided to hand back her CBE with immediate effect.
Unionised members of Amazon’s Birmingham facility have become the latest to announce strike action against the global giant. While only 100 workers are expected to down tools, the GMB union said it hoped to use the action to boost the profile of its ongoing dispute.
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GBP: Will growth rebound?
Sterling lost around half a cent against the US dollar yesterday but traded flat against the euro.
The UK’s GDP fell by more than expected in October, so November’s numbers offer a clean slate when they land on Friday. Economic activity is expected to have expanded by 0.1%, but anything better than the previous -0.3% is likely to boost morale.
GBP/USD: the past year
EUR: Job market still strong
EUR/USD fell by around a third of a per cent yesterday, while GBP/EUR was essentially unchanged.
The European economy has thus far proven itself fairly well insulated from higher interest rates. The eurozone’s unemployment rate fell to just 6.4% in November, bolstered by historical tight markets in places like Germany and the Netherlands.
USD: Bigger fish to fry
The US dollar made up much of the value it lost to the pound and the euro on Monday.
The US dollar’s surge yesterday indicated a risk-off tone in financial markets. That came despite little new evidence from the American economy, although Thursday’s CPI figures and Friday’s PPI will help shed some light on that.
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