GBP losses were sustained over Friday's trading hours. Retail sales painted a dismal end to 2024 for the UK economy, seeing markets raise the odds of three rate cuts by the Bank of England (BoE) this year. Otherwise, market moves were fairly muted on Friday ahead of today's inauguration of President Trump
*Daily move - against G10 rates at 7:30am, 20.01.25
** Indicative rates - interbank rates at 7:30am, 20.01.25
On the data front this week, the UK and GBP will come under scrutiny with the release of job numbers on Tuesday and PMI numbers on Friday. Wage growth will give us an indication of inflationary pressures on the economy and the unemployment rate and PMI data will give us another health-check on the economy.
In recent weeks, apprehensions about the UK economy have surged, prompting markets to anticipate the possibility of three rate cuts this year. This isn't solely attributed to the deceleration of inflation but also stems from broader economic concerns, as highlighted by BoE member Taylor last week. Disappointing job and PMI data will likely see further declines on GBP.
EU and US PMI numbers are also out on Friday as a gauge of economic output for January.
However, focus this week will depend on what Trump does in this first few days of his presidency. Financial markets are bracing themselves for a barrage of executive orders ranging from immigration to possible trade tariffs. USD volatility seems well likely to ramp up.
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