Weekly Market Report 15/01/2018


GBP/EUR and GBP/USD had a very volatile week with Sterling reaching 18-month highs against the Dollar at 1.3690. On the other hand, GBP/EUR traded with highs of 1.1340 and lows of 1.12000. Some key data coming out in the week ahead will have an impact on Sterling with the Consumer Price index (YoY) for December which will be released on Tuesday and expected to rise 0.1% from previous. Tuesday could be a volatile day for Sterling if figures come in above or below expected.


Strong week for the single currency as the ECB Monetary Policy meeting proved to be surprisingly Hawkish. Policymakers are now starting to debate the need to slow down Europe’s Quantitative easing programme. Friday morning saw Merkel reaching ever closer to reaching a coalition agreement eliminating one of the big risks to Europe this year. Euro hit 3-year highs against the dollar breaking through 1.21 barrier. Looking ahead to Wednesday this week with Europe’s Consumer Price Index (YoY) for December which is expected to remain at 1.4%. We could see volatility if data comes in either side.


Tough week for the Greenback as it weakened around 2 cents against all major pairings even with equity markets hitting all-time highs. A lot of weakness came in the early hours of Friday morning after Trump’s controversial comments on migrants and the UN accusing him of using a racial slur. All major data release came in as expected apart from the Consumer Price Index coming in 0.1% above expected although this did little to strengthen the Dollar. A quiet week expected from the US with no major data releases and Monday being a non-trading day but with all the controversy surrounding Donald Trump we are expecting volatility in the Dollar.

Data for the week ahead:
Tue – GBP Consumer Price Index (YoY) (Dec)
Wed – EUR Consumer Price Index (YoY) (Dec)
Wed – EUR Consumer Price Index – Core (YoY) (Dec)
Wed – CAD BoC interest rate decision
Thu – AUD Unemployment rate

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