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The leafy avenues of Chiswick, where prices are still rising (William Barton / Shutterstock)
The pound continued through Monday much where it left Christmas Eve against both the euro and US dollar, albeit with a few wobbles.
However, this remains a strong rate by recent standards, with GBP/USD 2% up and GBP/EUR 0.5% up on this time last month. That leaves the pound to euro at its best since October and pound to US dollar at its best since September.
The main prompt was the lowering expectations of interest rate cuts early in the New Year. That will be decided on the data, and the next important data release on the UK side will be a shop inflation report from the British Retail Consortium in a week’s time. There was a report yesterday from the National Institute of Economic and Social Research that Chinese exporters – put off by high US tariffs – will instead divert cheap goods to the UK, potentially driving down inflation.
However, there is plenty still happening elsewhere, including some European countries’ inflation shortly today. And yesterday there was positive news on French unemployment, with initial jobless claims markedly down.
Also showing the impact of government action, the high-end estate agency Savills reports that the government’s new “mansion tax” was less bad than many had expected, causing luxury property price falls to moderate since the Budget. The strongest price growth, indeed, was in Chiswick, where £2m-plus family homes rose in price by some 1.3% in Q4.
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 Business Account manager on 020 3918 7255 to get started.
GBP: Sterling holds onto pre-Christmas gains
GBP/EUR has remained looking strong through the Christmas period (when, it has to be remembered) some parts of the world continue working. There are no major data releases listed on the UK side today or tomorrow, but news from other countries could have an impact.
GBP/USD past year
EUR: How will inflation data hit euro?
The single currency weakened by some 0.5% on average against leading pairs last week, with the exception on of USD, against which it gained 0.5%. We’ve got Spanish inflation data about to come out, but that will be it for 2025.
GBP/EUR past year
USD: Dollar in retreat
It’s been a torrid month for the dollar with losses averaging 1% in the past week and 2% in the past month against most pairs, including sterling. This evening we’ve got the FOMC minutes coming out, which may well have the power to move the market late in the day.
USD/GBP past year
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