Market momentum is shifting as UK data surprises to the downside and expectations build for a Bank of England rate cut. With the U.S. dollar extending its decline and a packed week of UK and U.S. releases ahead, volatility could be on the horizon. Catch up on the latest insights in our article below đź”˝
Key Insight:
- The U.S. dollar continues to lose momentum
- Strong UK data reinforces the outlook for an upcoming rate cut
Market Recap:
The U.S. dollar extended its decline on Thursday after the Federal Reserve delivered a tone that was softer than markets had anticipated. Adding to the pressure, weekly jobless claims rose by 44,000, signalling emerging strain in the labour market. The weaker USD helped major currencies push higher, with both GBP/USD and EUR/USD climbing to their strongest levels in roughly two months.
Today's Market Watch:
The UK delivered the only notable data release today, reporting a surprise 0.1% contraction in economic activity for October. The weaker reading highlights the ongoing struggle to revive growth and has reinforced expectations that the Bank of England may move ahead with a rate cut at next week’s meeting. As a result, sterling has eased against major currencies.
Looking ahead, the U.S. dollar may remain under pressure with a busy week of data approaching, including November’s employment and inflation figures. The UK will also take centre stage with its own labour and inflation updates, followed by the Bank of England’s widely anticipated 25bps rate cut. With key announcements on both sides of the Atlantic, markets should be prepared for a potentially volatile week.
12th December 2025
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