EU & US interest rate decisions ahead



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waterman
Written by Dan Waterman
January 27th, 2025
USD weakens by 1% as Trump demands lower interest rates..



GBP
£-£ is currently trading at a 2-week high with £-$ hitting a 3-week high, as the Pound slowly recovers from a painful start to 2025. Without major UK data this week, there is a good chance further extensions could be made on the above pairs.

What happens after this week is almost impossible to predict, due to the sheer amount of variables at play in financial markets at the moment. Is the Pound headed back to 1.20 mid-market against the Euro and will £-$1.30 mid-market be realised again soon? I'm not so sure..

Even though the UK PMI's performed better than expected last Friday and it did present a welcome break from the endless slew of downbeat UK economic releases. Things still remain just that, downbeat.

It's a free hit for the Pound this week, so let's see if it can jump up the G10 table where it currently sits bottom of..




EUR
The Euro received a boost last Friday with their PMI numbers too beating consensus. Interestingly, it was Germany that took the headlines with good signs of a recovery after being the sick child of Europe for nearly 2-years now. 

A composite reading of 50.1 means a welcome return to growth (for now) for Europe's largest economy. Both services and manufacturing posted far better than forecast results and helped the prospect of a positive European economic recovery in 2025. 

There is plenty of data due out of the Euro-Zone this week and particularly from Germany, so let's see if the recent good signs continue. The main data of course is the ECB interest rate decision with a 25bp rate cut expected and already priced into the Euro. 



USD
The Dollar has weakened for the 3rd straight week after President Trump made it very clear he wants lower interest rates in the US (bad news for the attached currency). He did suggest that interest rates all over the world would follow the US, but for now these comments have only hurt the USD..

After suffering for 3-months, GBP v USD achieved its best week in more than a year last week and so current gains should not be sniffed at in our opinion for anyone in the market to buy Dollars. This recovery will no doubt be tested by the Fed interest rate decision and following comments on Wednesday.


Please check out the main events of the week below..



Expected mid-market ranges for January 27th 2025

gbp
GBP
usd
USD

    $1.2400 - $1.2550    


gbp
GBP
eur
EUR

    €1.1825 - €1.1925    

Upcoming Data
Monday 27th January 2025
15:00 US - New home sales



Tuesday 28th January 2025
07:45 EU - French consumer confidence
08:00 EU - Spanish unemployment rate
10:00 EU - Spanish consumer confidence
13:30 US - Durable goods
14:00 US - House price index
15:00 US - Consumer confidence




Wednesday 29th January 2025
07:00 EU - German consumer confidence
08:00 EU - Spanish GDP
13:15 EU - ECB monetary policy statement
13:30 US - Goods trade balance & wholesale inventories
13:45 EU - ECB press conference
19:00 US - Fed interest rate decision
19:00 US - FOMC press conference




Thursday 30th January 2025
06:30 EU - French GDP & consumer spending
08:00 EU - Spanish inflation
09:00 EU - German & Italian GDP
10:00 EU - Euro-Zone GDP, unemployment rate & consumer confidence
13:15 EU - ECB interest rate decision
13:30 US - GDP, initial/continuing jobless claims
13:45 EU - ECB press conference

15:00 US - Pending home sales
21:30 US - Fed's balance sheet




Friday 31st January 2025
07:00 EU - German retail sales
07:45 EU - French inflation
08:00 EU - Spanish retail sales
08:55 EU - German unemployment rate
13:00 EU - German inflation
13:30 US - PPI & personal income/spending




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