Sterling strong as interest rates expected to remain the same
24th January 2020 Market Update
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?? GBP - Sterling was the 2nd best-performing currency last week, as there are reduced chances that interest rates will be cut this Thursday by the Bank of England. Sterling was further supported on Friday, as flash manufacturing and flash services PMIs were both released above market expectations. There is no data of note being released from the UK today. All eyes will be on the UK this Thursday, as there is still a relatively high chance of an interest rate cut, although the market currently expects rates to stay the same. This Friday will be a momentous day for the UK, as it will finally leave the EU and Boris will declare that Brexit has been delivered, despite the trade negotiations only just beginning.
?? EUR - Flash manufacturing and services PMIs were released from across Europe on Friday morning. Manufacturing exceeded expectations, whilst services was below the market expectations. The euro was under pressure last week as Christine Lagarde launched the banks first strategic review since 2003. There is no significant data today from the eurozone. This week Spanish unemployment figures are released Tuesday morning, whilst the rest of the unemployment data from across the Eurozone is released Thursday.
?? USD - Flash services and manufacturing PMIs were also released from the US on Friday. Manufacturing was below expectations, whilst services exceeded market expectations. Like the eurozone and the UK, there is no significant data out today which is likely to affect the market. This week there is an interest rate decision released from the FOMC, where rates are expected to remain at 1.75%. The FOMC statement released with the decision, along the press conference that follows will provide forward guidance for the market.
GBP: The pound remains strong, as the chances of an interest rate cut this Thursday are reduced
EUR: Unemployment figures are the only data of note this week from Europe
USD: The FOMC are expected to keep rates as they are Wednesday evening
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