Manufacturing Orders, Dollar Stability, and UK Labor Dynamics in Focus.

EUR: Manufacturing New Orders Show Modest Growth Amidst Volatility

In November 2023, the adjusted real price of new manufacturing orders in the Eurozone edged up by 0.3% on a monthly basis, according to provisional data from the Federal Statistical Office (Destatis). However, a three-month comparison revealed a 4.5% decrease in orders for the period from September to November 2023. Excluding large-scale orders, there was a 0.6% dip in new orders in November compared to the previous month. Additionally, German exports saw a 3.7% increase, and imports rose by 1.9% in November 2023 compared to October 2023, according to seasonally adjusted figures. On a year-on-year basis, exports dropped by 5.0%, and imports fell by 12.2% compared to November 2022.

USD: Dollar Holds Steady as Markets Await U.S. Inflation Report

The U.S. dollar maintained stability on Monday as investors awaited a crucial U.S. inflation report later in the week for insights into the Federal Reserve’s monetary policy outlook. The greenback’s strength was supported by a rebound in U.S. Treasury yields, with traders adjusting their expectations for the pace and scale of Fed cuts in the coming year. A key reading on U.S. inflation scheduled for Thursday could influence these views. Recent data indicated stronger-than-expected hiring and wage growth in December, signaling a resilient labor market. However, a simultaneous survey revealed a notable slowdown in the U.S. services sector, presenting a mixed outlook for the world’s largest economy.

GBP: UK Employers Boost Pay Amid Lingering Inflation Concerns

In December, British employers increased wages and exhibited a partial recovery in hiring, suggesting persistent inflationary pressures in the labor market. The Recruitment and Employment Confederation (REC) survey, released on Monday, indicated a continued reduction in permanent worker hires, albeit less severe than in November. The Bank of England, which raised its benchmark interest rate to 5.25% in August, remains cautious about inflation and prolonged elevated borrowing costs. Official data reveals a pay growth rate of just over 7% in the three months leading up to October, prompting the central bank’s concerns about excessive wage growth.

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.