Daily Analysis | Clear Treasury

Our daily analysis of EUR, GBP and USD.

DAILY ANALYSIS

EUR

The ECB held rates steady at 2% yesterday, with President Lagarde noting that policy remains “in a good place” amid easing global economic risks, and signs of resilience across the Eurozone. Lagarde also highlighted that the de-escalation in the U.S. – China trade tensions and the Middle East conflict has reduced the downside risks to growth.
Moreover, we saw Q3 GDP release slightly beat expectation at 1.3% vs 1.2% forecasted, though still below the 1.5% prior, offering cautious optimism for the Euro.
All eyes now turn to this mornings HICP figures, expected to drop slightly lower by 01.%; however, any upside surprise caused by underlying resilience from the Euro could spark near-term volatility.
GBP/EUR trades around 1.1365 at the open this morning.

The Dollar traded cautiously following the Feds ‘Hawkish’ 25bps cut and mixed sentiment from the U.S. – China trade deal, with analysts debating whether the agreement marks progress, or merely puts tensions on hold.
With there being no major economic data today, our focus turns to speeches from Fed officials Bostic and Hammack for clues on the future policy direction within the U.S. as inflation levels remain elevated.
EUR/USD trades below 1.1565 at the open this morning, down 0.4% from yesterday’s session.

We come to the end of an eerie week for the Pound, as Sterling remains under pressure during ongoing political noise – from the £8bn Eurofighter deal and the OBR’s productivity downgrade to Reeves’ housing rule breach, uncertainty continues to deepen around the UK’s economic outlook.
Attention shifts to next Thursday’s BoE interest rate decision, where a highly anticipated 25bps rate cut is priced in; with any deviation or cautious tone from policymakers possible driving fresh volatility for the Pound.
GBP/USD trades below 1.3145 at the open this morning, down 0.38% amidst persistent UK economic weakness.

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