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Last week, Sterling fought to regain some fairly modest ground against the majors whereas; political uncertainties in the Eurozone thanks to upcoming elections and Trump’s fiscal policies severely damaged the euro and dollar respectively.
Markets haven’t completely forgotten about Brexit though as it looks like Sterling could take an impact this week due to the political uncertainty. There are rising concerns about the possibility of a second Scottish independence referendum as part of the fallout from the Brexit vote.
Focus on the US
On the political note, this week will likely be fuelled by the US as we have Donald Trump speaking on Wednesday about healthcare reform amongst other topics before the Congress in Washington DC. We also have Fed Chair Janet Yellen speaking on Friday afternoon and plenty of ticket US data spread out across the week – it’s likely to be a volatile next 5 days for GBPUSD.
On the other hand, the US calendar may provide some mixed news for the dollar with a further healthy pick-up in personal consumption in January forecasted. Although, core-PCE inflation looks set to edge back to 1.6%.
Eurozone cash HICP inflation expected to rise
Eurozone Cash HICP inflation is expected to rise to 2%, slightly above the ECB’s target, which could lead to further calls from some quarters for a tighter monetary policy.
More specifically however, today all eyes will be on the minimal macro-data we’re given to start the week with the monthly US Core Durable Goods Orders at 1:30PM. We’ll have an array of less important euro data throughout the morning and US data throughout the afternoon too but this isn’t expected to cause too much of an impact.
