It’s a huge week for inbound data across G3 currencies, providing key information to support central bank activity around inflation and employment. A rate cut in the UK is expected, while a hold from the ECB will also see Lagarde’s messaging having to balance the stronger growth outlook with lower long term inflation forecasts.
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This will be our last Weekly Update for 2025. We’re taking a short break over Christmas, but will be back at the beginning of January. Thanks for reading and see you next year!
Current rates
| Currency pair | Rate |
|---|---|
| gbp usd | 1.3386 |
| eur usd | 1.1746 |
| gbp eur | 1.1395 |
Rates correct as of 11:30pm on Monday 15 December but may now have changed.
The Big 3
A deeper look at the performance of major currency pairs this week. Become a subscriber to receive the full reports.
Sterling advances as markets weigh BoE and US data
Sterling extended its advance against the dollar last week, underpinned by a softer USD following the Fed’s rate cut and Powell’s less-hawkish tone. Attention now turns to the BoE, where a rate cut is widely expected, placing the spotlight on UK inflation as the key swing factor for sterling.
EUR/USD supported by hawkish ECB tone and softer dollar
EUR/USD extended its rally last week, supported by a softer dollar and increasingly hawkish ECB rhetoric. With no rate cut expected at Thursday’s ECB meeting, markets will focus on Lagarde’s guidance. PMI data, especially from Germany, could reinforce the euro’s momentum, while the dollar remains vulnerable unless this week’s employment data delivers a clear upside surprise.
GBP/EUR softer as markets weigh inflation and rate outlooks
GBP/EUR softened after sterling’s rally stalled at a key long-term resistance level, with attention now firmly on UK inflation and central bank messaging. With ECB policy support already well established, Lagarde’s guidance will be watched for how she balances a firmer growth outlook against anchored inflation, a mix likely to keep GBP/EUR sensitive to any shift in relative policy expectations.
Looking forward
Key dates for your calendar.
- Monday: Canada CPI.
- Tuesday: US and UK jobs data. US housing and building data. German manufacturing PMI.
- Wednesday: UK and Eurozone CPI.
- Thursday: US CPI (first in almost two months). The Bank of England and ECB both making interest rate decisions.
- Friday: Eurozone consumer confidence. Japan CPI. UK retail sales.
Here’s what we’re talking to our clients about
We’re always here to support. Here are some of the conversations we’re having:
- EoY wrap up, talking all things planning and support for 2026
- BOE meeting on Thursday
- Unsettlement of markets into the new year
The contents of this article do not constitute financial advice and are provided for general information purposes only. While the content is based on information believed to be accurate at the time of publication, no guarantee is provided.