Sterling starts the week with several global and domestic events in focus that could influence currency markets.
Latest market insights:
- In the US, former President Donald Trump has returned to the headlines after signalling potential tariffs on European countries that oppose his proposed Greenland acquisition. While this is political in nature, markets tend to react quickly to any suggestion of trade friction. Increased uncertainty can support the US dollar in the short term, particularly if investors move toward perceived safe-haven currencies.
- Closer to home, UK labour market data is released tomorrow, including unemployment figures and average earnings for the past three months. Expectations are for unemployment to edge lower. If confirmed, this could reinforce the view that the UK jobs market remains resilient, a supportive signal for sterling. Stronger employment data can also influence interest-rate expectations, which often feeds directly into exchange-rate movements. Followed by UK inflation data which is also expected to be released on Wednesday.
- Later in the week, attention turns back to the US with third-quarter GDP figures and inflation data due on Thursday. Both are expected to show continued strength in the US economy. This has already helped the dollar recover some recent ground against the pound and could add further momentum if the data beats expectations.
- Finally, global politics will also be under the spotlight as world leaders gather at the World Economic Forum in Davos. Any shifts in tone around trade, geopolitics or economic cooperation can quickly feed into currency markets, so headlines from the summit are worth watching.
As always, periods like this can create both risks and opportunities in the FX markets. If you have upcoming currency requirements or would like to discuss how these events could affect your plans, we’re here to help, contact Lumon on +44 (0)204 506 5672 for a free, no-obligation conversation and discover what options you have available to help.
