Dear Reader,

Today's overview of economic news and market action

• The euro continued to sink yesterday, as the prospect of a Republican “clean sweep” came further into focus …
• At the same time, markets continued to digest political turmoil in Germany …
• Against this backdrop, the euro was under downward pressure yesterday …
• This saw EUR/USD trade down to a low of $1.063, while EUR/GBP troughed at 82.6p …
• Overnight the euro recouped some of its loses versus sterling, albeit EUR/GBP opens today still below the 83p …
• Elsewhere, EUR/USD continues to trade in the bottom half of $1.06-1.07, near its low from yesterday …
• GBP/USD is changing hands back close to $1.28 …
• There is a relatively quiet look to the data calendar today, meaning the euro will remain in focus …

All rates quoted are indicative market rates.

October data provided tentative signs of a turnaround in manufacturing sector performance, with both production volumes and incoming new work returning to growth. Although modest, the upturn in new orders was the strongest for nearly twoand-a-half years and achieved against a backdrop of still subdued export demand.

The November meeting of the US Federal Reserve Open Market Committee (FOMC) saw the central bank cut interest rates for the second consecutive time. The target range for the Fed funds rate was reduced by 25bps to 4.50-4.75%. The decision by the FOMC to cut rates by 25bps was unanimous, following a split on the FOMC for September’s bumper 50bps cut.

The November meeting of the Bank of England’s Monetary Policy Committee (MPC) saw the central bank lower Bank rate by 25bps to 4.75%. This was the second rate cut from the Bank of England (BoE) in three meetings. Subsequent to this, the BoE cuts rates for the first time in August, following its rate tightening cycle, which had been in place since the end of 2021.