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FX DAILY REPORT – 13 December 2024

  • The Rand opened weaker against the USD & EUR, and opened stronger against the GBP this morning.
  • US PPI (MoM) results came out higher than expected at 0.4% compared to the expected 0.2%. PPI is seen as a future indicator of CPI inflation and this uptick in PPI has raised concerns that inflation could resurge in the US. As a result, the USD strengthened, as rising inflation often prompts stricter interest rate policies.
  • The upcoming US interest rate decision appears to be fully priced in, with a 25-basis-point cut anticipated next Wednesday. According to the CME FedWatch Tool, the probability of this rate cut is now at an impressive 96.4%.
  • The ECB did cut rates by 25 basis points yesterday as expected, little to no market reaction was seen as this rate cut was already priced in by investors.

Todays Events:

 

  • UK GDP (MoM) growth at 9:00 – Expected to be 0.1% compared to previous months -0.1%. A higher-than-expected result can be seen as positive for the GBP.
  • UK Manufacturing Production (MoM) at 9:00 – Expected to be 0.2% compared to previous months -1.0%. A higher-than-expected result can be seen as positive for the GBP.