Foreign Exchange Market Update

January 2, 2025

Eurozone Manufacturing Activity Falls Most in 9 Months

Euro traded at 1.1746 against USD at 9:00 AM PST

The euro area manufacturing activity contracted the most since March 2025, with production levels falling for the first time since last February. The final manufacturing PMI declined to 48.8 in December from 49.6 in November. The flash score was 49.2. The reading fell further below the 50.0 no-change mark, indicating a sharper deterioration in factory operating conditions. The reading was the lowest since March 2025.

Factory output decreased across the block after nine consecutive months of growth. There was an accelerated fall in new order intakes. Exports made total new business volumes lower as foreign demand dropped the most in eleven months. Purchasing activity was reduced to the strongest extent since March last year, and post-production inventories declined at the softest pace since September 2024.

There was growing evidence of supply chain pressure on manufacturers. Input cost inflation intensified. The rate of increase in purchasing prices was the fastest in close to a year-and-a-half. Despite stronger cost pressures, factories discounted their goods prices. Charges declined for the seventh time over the last eight months in December. Further, factory job losses were extended into the final month of the year, stretching the current sequence of fall to just over two-and-a-half years.

Finally, sentiment among manufacturers improved for the year ahead. Manufacturing performance worsened in a few key economies in December. Most notable was Germany, which registered its steepest fall since last February. Italy and Spain also showed renewed drags. Meanwhile, France bucked the downward trend in manufacturing PMI readings, with its index rising to a 42-month high.

Germany's manufacturing sector registered a decrease in output for the first time in ten months amid a sustained fall in demand. The final factory PMI fell to 47.0 in December from 48.2 in the previous month. The initial score was 47.7.

In contrast, France's manufacturing activity registered its strongest month in three-and-a-half years in December. The final manufacturing PMI rose to 50.7 from 47.8 in the prior month. The reading was slightly above the flash estimate of 50.6.

Italy's manufacturers closed the year in negative territory after having failed to sustain a growth spurt in November. The PMI plunged to 47.9 in December from 50.6 in the previous month.

Spain's manufacturing activity deteriorated for the first time since April amid falls in both output and new orders. The factory PMI registered 49.6 in December compared to 51.5 in November. 01/02/2026 - 08:34:00 (RTTNews)

United Kingdom (U.K.) House Price Growth Weakest Since 2024

British Pounds traded at 1.3493 against USD at 9:00 AM PST

U.K. house prices grew at the slowest pace since April 2024, largely due to the high base effects. House prices posted an annual growth of 0.6% in December, which was weaker than the 1.8% rise in November. Monthly, house prices dropped 0.4%, in contrast to the 0.3% increase seen in November.

Although consumer sentiment was relatively subdued, with households reluctant to spend and mortgage rates around three times their post-pandemic lows, mortgage approvals remained near pre-COVID levels.

Stamp duty changes that took effect at the beginning of April created volatility through the spring and summer. Transactions spiked in March to avoid additional tax, and activity softened in the following months. Affordability constraints eased somewhat with house price growth well below the rate of earnings growth and a steady fall in mortgage rates.

In the fourth quarter, average house prices grew 0.7% sequentially and advanced 1.7% from the same period last year. 01/02/2026 - 04:22:00 (RTTNews)

Hong Kong Retail Sales Growth Eases in November

Hong Kong's retail sales growth moderated for the first time in five months in November. The value of retail sales climbed 6.5% year-on-year in November, slower than the 6.9% rise in October. Sales have been rising since May.

Online sales, which accounted for 11.2% of the total sales value in November, increased by 28.4% from the same period last year, compared to a 27.2% growth in the previous month. Sales of consumer durable goods alone grew 27.0% from last year, and those of jewelry, watches, clocks, and valuables climbed by 3.6%; sales at department stores were 3.8% higher. Meanwhile, fuel sales declined sharply by 11.1%. The volume of retail sales rose 4.4% annually versus a 5.3% increase a month ago. 01/02/2026 - 08:03:00 (RTTNews)

Singapore Gross Domestic Product (GDP) Growth Accelerates in Q4

Singapore's economic growth accelerated in the fourth quarter, driven by strong expansions in the biomedical and pharmaceutical output. Gross domestic product grew 5.7% yearly in the fourth quarter, outpacing the 4.3% increase seen in the third quarter. However, quarter-on-quarter GDP growth moderated to 1.9% from 2.4% in the prior quarter. For the whole of 2025, the economy logged an expansion of 4.8%, extending the 4.4% growth seen in 2024.

Manufacturing output surged 15.0% yearly in the fourth quarter, largely driven by output expansions in biomedical manufacturing and electronic clusters.

The construction sector grew 4.2% from the prior quarter, supported by an increase in both public and private sector construction output. At the same time, services-producing industries gained 0.8%. Elsewhere, house prices grew at a slower pace in the fourth quarter. The house price index climbed 0.7% following a 0.9% rise in the third quarter.

For the whole of 2025, the overall increase in the price index moderated to 3.4%, marking the smallest increase in a year since 2020. 01/02/2026 - 00:01:00 (RTTNews)