RedFX : The Week Ahead

With the USD losing ground throughout last week despite very strong US employment data, all eyes will be on this week’s data. Monday’s data showed European Investor Confidence falling from -11.1 to -17.5 in January which is likely to cap EUR/USD at these levels around 1.0650.

In Europe, ECB member Schnabel will speak on Tuesday against a backdrop of inflation in the Eurozone beginning to ease and the ECB continuing its policy of raising rates.

In the US, Fed Chair Powell speaks on Tuesday evening, and Thursday sees the release of inflation data, with all eyes on indications as to when the US will slow the pace of increasing interest rates.

The UK must wait until Friday for some 2nd-tier Industry and Manufacturing data during a light week, but with GBP/USD pushing 1-month highs, the trend of GBP might be in the hands of other currencies this week.

Elsewhere, we can expect a lively week for AUD and Asian currencies with Chinese inflation data on Wednesday alongside Australian Retail Sales.

Last week we saw clients taking advantage of any dip in both GBP/$ and EUR/$ as a buying opportunity and plenty of corporates beginning to discuss the medium-term outlook for GBP which seems to be deteriorating.

Economic calendar:

Week Rates: