The USD correction continued yesterday following on from the prospect of a US-China deal and softer US data.
This morning, UK retail sales for January came in better than expected at 1.7% - a jump from 0.6% drop in sales in December. This was a bit surprise but the numbers add to the strong data from the UK across this whole week.
*Daily move - against G10 rates at 7:30am, 21.02.25
** Indicative rates - interbank rates at 7:30am, 21.02.25
PMI day with the release of the manufacturing and services numbers from the UK, EU and US to give us a gauge of how each economy is performing this month. However, whilst these data points will have an impact on FX, the underlying narrative in markets is one of how much more this correction on USD will continue.
We wouldn’t be surprised if there was a bit more in this move with the potential for both GBPUSD and EURUSD to hit the highs seen in December. It's also worth adding that there could be some nervousness on the EUR today ahead of the German elections on Sunday. Therefore we wouldn’t be surprised to see the currency weaker as we finish this week.
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