Uncertain Markets
GBP: The British Pound has seen slight support caused by growing expectation that November’s GDP data may outperform forecasts. A rebound in manufacturing, particularly with Jaguar Land rover and resilient services could support although weaker retail spending points to lingering consumer caution. Many in the market, alongside looking at GDP data, are turning their attention to the Bank of England commentary helping to support interest rate expectations for longer term direction.
EUR: The Euro continues to remain under pressure as investors price in fresh geopolitical risk following continued US rhetoric over Greenland, leading to growing concern surrounding European security. This uncertainty has kept sentiment fragile ahead of the talks between the US and Denmark. Alongside geopolitics, market attention is looking at the upcoming ECB commentary, with many in the market watching closely for signals on whether policymakers remain open to interest rate cuts amid an uncertain situation.
USD: The US Dollar traded narrowly as the market digested December’s inflation data. The headline CPI rate held at 2.7% and core inflation remained at 2.6%, this offered no surprise to the market and left the expectations of Federal Reserve policy unchanged. Safe-haven demand remains limited. Attention is now turning to retail sales data and upcoming Federal Reserve speeches for potential direction, as a result the market remains cautious and traders acting reluctant to take bold positions.
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