After a strong day yesterday, sterling is slightly weaker against the euro and the dollar this morning as it continues to move in tandem with the stock market. However, it’s thought that the UK’s speedy vaccine rollout will continue to support the pound.
It’s a busy day for data releases in the Eurozone, which will illustrate how the European economy has fared this month. At the Federal Reserve’s press conference yesterday, Fed Chair Jerome Powell said that the economic outlook in the US is still “highly uncertain”.
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GBP: Stock market fall weakens pound
The pound is slightly weaker this morning due to a fall in the stock markets, which sterling has been moving in tandem with recently. However, it is hoped that the UK’s vaccine rollout will still provide support for the pound and keep it above key levels.
Economic data leading up to the Bank of England’s interest rate decision next week could have an impact on the pound over the coming days, especially if the data points towards the possibility of negative rates.
Car production figures for December were released for the UK this morning, showing a 2.3% decline year-on-year. This was the lowest level in four months, with some firms affected by border closures and thus supply issues due to the lockdown.
EUR: Sentiment figures expected for the Eurozone
The euro is under pressure against the dollar this morning but is stronger against the pound.
It’s a busy day for data releases in the Eurozone, with economic sentiment and consumer confidence figures to be released this morning. This will be followed by inflation rate figures for Germany. This data will paint a picture of how Europe’s economy has fared throughout January.
The European Central Bank’s Governing Council Member, Klaus Knot, said yesterday that the ECB have the necessary tools to curb the euro’s strength. The euro gained almost 9% against the dollar last year.
USD: Powell says outlook is still “highly uncertain”
The dollar is stronger against the pound and the euro this morning, possibly due to negative movements in the stock and oil markets.
The Federal Reserve held their latest decision on interest rates yesterday and left the rate unchanged as expected. It said it would continue to support the economy as necessary and Fed Chair, Jerome Powell, discussed the central bank’s bond-buying program and the economic outlook, which he said was still “highly uncertain”.
GDP and jobless claims figures will be released for the US later today.