Sterling and the euro have both seen notable moves last week, with pre-Budget positioning, economic data, and central bank signals driving the action. The big event of the week however is an almost certain rate cut from the Fed on Wednesday. Rhetoric from Fed chair Powell and indeed other central banks this week, will provide cues on near-term rate expectations and market direction.
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Current rates
| Currency pair | Rate |
|---|---|
| gbp usd | 1.3316 |
| eur usd | 1.1651 |
| gbp eur | 1.1429 |
Rates correct as of 11:50pm on Monday 8 December but may now have changed.
The Big 3
A deeper look at the performance of major currency pairs this week. Click below to get the full report.
Sterling strengthens ahead of key Fed signals
All eyes are on Wednesday’s FOMC meeting this week with a 0.25% rate cut fully expected. Powell’s rhetoric, and the ‘dot plot’ of members rate policy expectations will still be of interest. With the dollar weaker in anticipation of this week’s events, sterling advanced, supported also by the continued unwind of pre-Budget short positions, and stronger UK services PMI data. The shift higher has been reinforced by improving technical signals and fresh buying interest.
EUR/USD rises as technical picture turns constructive
The euro extended its advance against the dollar last week, supported by improving technical momentum and the ECB’s holding position while the Fed prepares to cut. Stronger eurozone data has added to the constructive tone, while the focus now turns firmly to this week’s FOMC decision. Those same events will be key drivers for whether EUR/USD can build on recent gains or face a pause.
GBP/EUR caught between central bank signals
Following sterling’s broader rebound, GBP/EUR also pushed higher last week as short positioning continued to unwind and UK services data surprised to the upside. Attention now shifts firmly to policy signals, with Governor Bailey’s remarks and UK GDP data key for whether the pound can extend gains or consolidates. However, euro-side support remains intact, with recent inflation data and increasingly firm ECB rhetoric helping to offset sterling strength.
Looking forward
Key dates for your calendar.
- Monday: China trade data. Japan GDP.
- Tuesday: US JOLTs job openings. Germany Balance of Trade. RBA is expected to leave rates unchanged.
- Wednesday: Fed interest rate decision and FOMC minutes. Bank of Canada interest rate decision. China, Brazil and Japan all release inflation data.
- Thursday: US trade data, unemployment claims and PPI MoM.
- Friday: UK GDP.
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:
- Fed announcement on Wednesday.
- Post budget Britain.
- Annual FX reviews preparing for 2026.
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.