This week, the focus for currency markets is firmly on the US, with a busy economic calendar likely to set the tone for FX movements.
Sterling continues to trade relatively strongly against both the euro and the US dollar. As a result, upcoming US data releases will be closely watched and could drive short-term volatility across major currency pairs.
Latest market insights:
- Tuesday: Markets will digest US inflation figures for December, alongside Automatic Data Processing (ADP) Employment data. These releases will be key in shaping expectations around future interest rate decisions and the overall health of the US economy. Adding to the uncertainty, recent reports that the US Justice Department has opened a criminal probe involving Federal Reserve Chair Jerome Powell have unsettled markets. This developing story has introduced additional political and policy uncertainty, which could heighten market sensitivity to incoming data.
- Wednesday: US retail sales, midweek, attention turns to US Retail Sales data. This provides valuable insight into consumer confidence and spending behaviour, both of which are important indicators of economic momentum.
- Thursday: UK growth data, towards the end of the week, the spotlight shifts back to the UK with the release of GDP data for November, alongside Industrial and Manufacturing Production figures. These numbers will offer a clearer picture of how the UK economy is performing and could prompt swift movements in sterling if results surprise either way.
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.
