GBPUSD hits 8-week high

Yesterday's currency recap

USD continued to weaken yesterday following the less-than-expected hawkish message from the Fed on Wednesday evening. A miss on the jobless claims did little to calm job markets nerves with number of claiming rising by 44,000. GBPUSD and EURUSD both hit 8-week highs.

Today's GBP rates

What we think

The only significant data release today comes from the UK, where the economy unexpectedly contracted by 0.1% in October, underscoring the challenges the government faces in its efforts to reignite growth.

The figures also strengthened expectations of an interest rate cut at next week’s Bank of England meeting, leading to a softening of sterling against its major counterparts.

A softer USD could well continue ahead of next week's deluge of data stateside with the release of November's job and inflation numbers. It's also a big week for the UK with the release of the same, alongside the Bank of England's meeting where it's widely regarded we will see a rate cut of 25bps. So we are likely to have a volatile week.

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