020 7898 0500
The US dollar strengthened yesterday on the back of a positive GDP report.
The American economy grew by an annualised rate of 4.3% in the third quarter of 2025, smashing forecasts of just over 3%. Consumer spending, exports and government spending all played their part in the biggest quarter-on-quarter expansion in two years.
Even with muted trading volumes, the US dollar was able to claw back the half-cent it had shed to the euro and pound in Tuesday’s morning session following the release of that data.
The other notable release on Tuesday also came from the USA in the form of durable goods orders. October saw a 2.2% fall in month-on-month volumes, led by steep falls in defence and non-defence aircrafts.
In Westminster, the government agreed to raise the inheritance tax threshold on farms from £1 million to £2.5 million. That marked a significant U-turn and an unusual one at that, coming as it did outside of parliamentary session. The decision will cost the taxpayer roughly £130 million annually.
Christmas is a time for festive treats, but Scottish whiskey makers haven’t been feeling very jolly. Sales fell by 3% in the first half of this year and manufacturers and distillers are now sitting on something of a supply glut. They’ll be hoping British consumers put a dent in those numbers over the coming days.
Speaking of whiskey, we’ll take a two-day hiatus from the daily currency updates for the festive break (please refer to our opening hours for details of when you’ll be able to contact us). From all the team, we wish you and your loved ones a happy and joyous Christmas.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your account manager on 020 3918 7255 to get started.
GBP: Festive cheer
December has been decidedly brighter for the pound. As the last day of trading before Christmas begins, sterling has strengthened by almost 3% against the US dollar since the start of the month. A smaller half-cent increase against the euro should still be seen as progress given the past few months.
GBP/USD: the past year
EUR: Facing another French showdown
The euro carriers a little political risk heading into the new year. France is still (yes, still) negotiating its budget in a protracted piece of political theatre that makes Washington look amateurish. An emergency rule delaying another vote until 2026 is expected to pass, but the parties will still need to reach a consensus if they hope to avoid another go in the prime ministerial carousel.
GBP/EUR: the past year
USD: Conflicting reports
The US dollar made some ground yesterday but saw its upside capped by a disappointing durable goods report. Transportation equipment and aircrafts were the big drags, although there were small improvements in the order volumes of fabricated metals and machinery.
EUR/USD: the past year
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business account manager on 020 7898 0500 or your Private Client Account Manager on 020 7898 0541.
