UK: Weekly FX Market Update 20 January 2025
GBP
With UK inflation surprisingly dropping, the market took a breather from worrying about stagflation, a possibility that had been weighing on the pound.
However, respite was short lived as both UK GDP and retail sales figures disappointed again.
Looking to the week ahead, UK Earnings data on Tuesday and Purchasing Managers Index on Friday could provide some clarity regarding the UK economy and the pound.
EUR
Last month’s ECB meeting minutes showed that some members wanted a deeper debate about a 0.5% rate cut. Will this weaken the Euro at the next meeting?
ECB President Lagarde speaks from Davos on Wednesday and Friday of this week.
USD
It seems like the whole world is focused on Donald Trump’s inauguration at the start of the week.
What will he really do? If he tones down or delays his tariff plans, could the Dollar weaken after a consistent period of USD strength for the last 10 weeks?
After softer than expected US CPI data last week, will positive Purchasing Managers Index data show that the US economy is still expected to grow while disinflation is underway?
Main events for this week:
Mon Jan 20
All day Donald Trump Inauguration
No Top tier data
Tue Jan 21
07:00 GBP Claimant Count Change/Average Earnings Index/Unemployment Rate
Wed Jan 22
09:00 EUR German IFO Business Climate
15:05 EUR ECB President Lagarde Speaks
Thu Jan 23
13:30 USD Unemployment Claims
Fri Jan 24
05:00 JPY Bank of Japan Interest Rate Decision/Press Conference
09:00 EUR Flash Manufacturing PMI/Flash Services PMI
09:30 GBP Flash Manufacturing PMI/Flash Services PMI
10:00 EUR ECB President Lagarde Speaks
14:45 USD Flash Manufacturing PMI/Flash Services PMI
15:00 USD Existing Home Sales
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