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January 27, 2025Cross-Border
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UK: Weekly FX Market Update 27 January 2025

GBP

  • GBPUSD rebounded last week – however, this was driven by US Dollar weakness rather than Sterling strength.

  • Whilst Chancellor Reeves was at the World Economic Forum looking for growth ideas and investments, UK consumer confidence fell to the lowest since the end of 2023.

  • A lack of UK data releases this week means that the pound could take a backseat and be driven by other currency news.

EUR

  • At Davos last week, Blackrock CEO Larry Fink said the mood surrounding the Eurozone was quite negative.

  • The ECB meets this week to set interest rates, with ECB board member Knot saying he is ‘comfortable’ with markets’ rate cut expectations of two 0.25% cuts for January and March.

  • Will the ECB cut rates by 0.25% on Thursday, and will ECB President Lagarde stick to setting policy on a meeting by meeting basis?

USD

  • Last Friday, President Trump said that he didn’t really want to levy tariffs on China if he didn’t need to. This apparent change of policy resulted in the Dollar weakening.

  • Notably, he also said that he wanted interest rates to be cut and the oil price to fall.

  • The Fed sets rates on Wednesday, but with the potential tariffs and tax cuts to come from President Trump, will Fed Chair Powell remain cautious over monetary policy and hold rates steady?

Main events for this week:

Mon Jan 27

09:00 EUR German IFO Business Climate

12:00 EUR ECB President Lagarde Speaks

15:00 USD New Home Sales

Tue Jan 28

00:01 GBP BRC Shop Price Index

13:30 USD Durable Goods

15:00 USD Consumer Confidence

Wed Jan 29

00:30 AUD CPI

13:30 USD Goods Trade Balance

14:45 CAD Bank of Canada Rate Decision

15:30 CAD BoC Press Conference

19:00 USD Federal Reserve Rate Decision/Statement

19:30 USD FOMC press Conference

Thu Jan 30

10:00 EUR Flash GDP

13:15 EUR European Central Bank Rate Decision/Statement

13:30 USD Advance GDP/Unemployment Claims

13:45 EUR ECB Press Conference

Fri Jan 31

08:00 EUR German Prelim CPI

13:30 CAD GDP

13:30 USD Personal Consumption Expenditure

14:45 USD Chicago PMI

About the author

Trevor Charsley

Trevor Charsley

Senior Market Strategist

Trevor has over 25 years' trading and sales experience. He produces regular market and technical analysis as well as help with the structure and management of FX hedging policies. Trevor is often listed among the top "currency forecaster on Bloomberg".