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After the dollar’s dramatic climb against the euro and the pound on Thursday, the European currencies only made negligible gains going into the weekend. So far this morning there have been small gains for the pound.
After the markets reopened on Thursday, USD climbed by almost 1% against both GBP and EUR, to an eight-month high over sterling.
On Friday, President Biden’s announcement that he would stick to his pledge and block Nippon Steel’s acquisition of US Steel led to minor USD losses against GBP and EUR. Biden said it was a “national security priority” to protect the country’s supply chains, preventing the Japanese acquisition.
The Bank of England revealed that while mortgage approvals in the UK were slightly lower than November’s high, at 65,700 they were still well above the 12-month average of 60,400. Coupled with Thursday’s news that UK house prices had increased by 4.7%, the fastest pace of increase since October 2022, the activity is indicative of buyers eager to complete their purchases ahead of 1st April’s stamp duty changes.
Later today, Germany’s official statistics agency Destatis will reveal the country’s year-on-year inflation, which is forecast to rise by as much as 0.3 percentage points to 2.5%. While the rise could be another blow to Olaf Scholz’s coalition ahead of February’s election, with a packed week of eurozone data releases it will be difficult to identify its impact on the euro’s stability.
Later this morning, we will get final results for the Purchasing Managers Index (PMI) across the eurozone and UK. If revised from earlier estimates, these could well affect exchange rates.
Tomorrow the EU will publish eurozone-wide inflation and unemployment rates. The USA has its JOLTs job opening report tomorrow and it will close out the week with Non Farm Payrolls on Friday.
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GBP: More uncertainty for the pound
After significant losses against USD when the markets reopened on Thursday, GBP has begun a slow claw back of lost ground. Later this morning, we’ll get a final result for Services PMI, and tomorrow more retail sales and house price data.
GBP/USD past year
EUR: A week of big data announcements
The euro closed out the week with mixed results, but having lost across the board since the markets reopened. Multiple eurozone countries are scheduled to release highly influential inflation and unemployment rate reports tomorrow.
EUR/USD past year
USD: Lack of clarity ahead of Trump’s return
After the markets opened on Thursday and USD saw its dramatic climb, the currency held steady going into the weekend. However, it’s difficult to predict if the currency will continue to see gains or even hold its position as the markets try to anticipate President Trump’s return to office.
USD/GBP past year
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