Market Update 9th January – 13th January

Where you will be able to keep up to date with all the latest changes in the currency market

GBP

The pound had a strong finish to last week rising 0.5% against the EUR and 1.5% against the USD. The bullish GBP continued this into the start of this week where we have already seen highs against the US Dollar and Euro that we have not seen since before Christmas. Last week we saw Rishi Sunak’s first speech of the year in which he promised to halve inflation and grow the economy by the next election, Which should in turn increase investor confidence in the Pound.This week we will be watching the UK Government’s talks with leading unions about future industrial action. Currently the level of strikes we are seeing across the U.K is expected to cause a loss in productivity and any resolution this week could see GBP strength. However, if we do see further strike days announced this could have an adverse effect on the Pound.

EUR

Last week we had Consumer Price Data released in the Eurozone. We  saw that the inflation rate in the Eurozone drop from 10.1% to 9.2%, this did not see a big movement in the rates against either the GBP or the USD as this level is concurrent with similar drops in the U.K and United States. The main market mover for the Euro was the mixed data we received over the course of last week for the USD due to their closely traded nature. This meant the Euro finished the week strong against the USD, but this still wasn’t enough to combat the Bullish GBP as we saw an overall drop of 0.5% against the pound last week. This week we will be watching unemployment data due on Monday, as well as closely monitoring how the Euro is effected by US CPI data this week.  

USD

The Dollar has had a slow start to the week as the Federal Reserve is expected to consider a smaller rate hike for their next interest rate decision as opposed to previous projections due to certain data sets we have seen across the U.S. The USD dropped more than 1% against the EUR and GBP towards the back end of last week. We also had the Nonfarm payrolls released towards the back end of last week, this saw a rise to 223,000 over the expected 200,000. This still failed to provide a boost to the US Dollar despite the strong showing indicating the future interest rate rises may not be as detrimental to the labour market. This week we have CPI data being released in the US, a rise could be seen as positive for the Dollar as this may encourage future rate hikes, whilst a low reading could have a negative effect on Dollar Quotes as it would indicate that the current level is effective and may discourage future rises.