Will this week's data lead to a break out from recent ranges?

The week ahead will focus on Fed Chairman Powell’s speech in the middle of the week, then Thursday’s ECB interest  rate decisions and Friday’s US employment data.

USD: There remains an underlying bid for USD due to the troubles in the Middle East and surrounding area. The US economy continues to show strength and all eyes will be on Friday’s Employment data and Powells’ mid-week speech. With 353,000 jobs created in January, we are expecting 200,00 to be created in Feb – any great deviation from this number could see a move in the USD.

EURO: The ECB has a tricky task ahead, with the Eurozone economy broadly stagnant and inflation appears to be falling but unconvincingly. The recent weakness (across all sectors) in Germany is exacerbating European weakness. This week’s ECB decision and speeches will be closely watched for indications of future rate moves.

EUR/USD has traded in a broad range of 1.0700 – 1.0900 recently, and it might be this week that gives us momentum to break out one way or the other.

GBP: Some hawkish comments on Friday gave the £ upward momentum as a Bank of England member suggested that rate cuts are still along way off - GBP/USD pushed through 1.2650 and GBP/EUR continued to hover around 1.1700 levels. This week sees the UK Budget, but this is a domestic issue and does not often affect currency markets – however, we shall see!

 GBP/EUR is attempting to push through 1.1750 but has not done so with any conviction.

 AUD: Inflation data this morning showed a decline to 4%, but did not affect the currency, which remained at 0.6500 vs USD

The week ahead:

·         Monday: EU confidence

·         Tuesday: China Services data / US Services data / Fed speeches

·         Wednesday: AUD GDP / EUR Retail Sales / CAD interest rate decision & speeches / Fed’s Powell semi-annual testimony

·         Thursday: AUD Trade Balance / China trade data / ECB Interest rate decision & speeches / Fed’s Powell semi-annual testimony

·         Friday: German industrial production / EU GDP / CAD employment / US employment