Sterling rebounds but the euro is still in the ascendancy | Smart Daily Currency Note

Sterling

Sterling continued to perform well on Friday, at one stage reaching 1.58 against the US dollar and 1.1850 against the euro, following the comments from the incoming Governor of the Bank of England Mark Carney on Thursday where he suggested that the central bank would refrain from additional monetary stimulus. This week see's key inflation data released in the UK on Tuesday, the Governor of the Bank of England is speaking on Wednesday and on Friday retail sales data will also be announced. Furthermore, a two day G20 meeting starts on Friday, so any news emerging from these meetings could cause volatility in the market. Sterling performed well last week; but, the underlying fundamentals in the UK remain very poor and it is still in a downward trend against the euro which started in the middle of last year. Call in now to see how it could fair going forwards. 

Euro

The euro continued to struggle on Friday despite German trade balance data released being much better than expected. The German data showed that exports have continued to increase and hit a record high in December underlining the disparity between the economy in German, Europe's powerhouse, and the rest of the Eurozone's economies as a whole. The EU leaders have now agreed the budget for 2014 to 2020 after all night talks took place in Brussels and represents a 3% cut compared to the current budget. The Eurogroup meetings continue today and tomorrow the President of the European Central Bank will be speaking. Given how influential his comments are they will be very carefully scrutinized by the market and could lead to some very rapid movements in the euro. The euro continues to be in  the ascendancy against Sterling and the US dollar and it will take a change in sentiment to reverse this trend, and the ECB President is the most likely person to achieve this if he so wishes.  Later on this week we have preliminary GDP data released across Europe with the overall GDP figure expected to show a 0.4% contraction. Call in now for the latest update and a live price from the market. 

US dollar

The US dollar has a mixed day on Friday following the release of better than expected trade balance data which showed that the deficit was narrower than anticipated. The Chicago member of the Federal Open Market Committee (FOMC) comments late on Thursday evening reinforced the FOMC's current mandate to keep monetary policy loose until the job markets start to recover. This week a number of other members from the FOMC will be speaking and it will be interesting to hear what they say following the Chicago's member comments late last week. On the data front, this weeks releases include consumer sentiment data, the weekly report on unemployment claims and retail sales figures will also be announced. Get in touch now for an up to the second price, and the latest news. 

Worldwide

Elsewhere, the Japanese yen was the stand out performer on Friday following comments from the Finance Minister suggesting that the Japanese yen's recent devaluation may have happened too quickly. The Canadian dollar struggled on Friday after worse than expected unemployment data was released. Better than expected Chinese trade balance data was released with both exports and imports increasing, helping China to overtake the US as the biggest trading nation in the world. Chinese and Honk Kong markets are shut for much of this week in accordance with the Chinese New Year celebrations and Japanese markets are shut today in accordance with the National Foundation Day bank holiday so you can expect low trading volumes in the market and increased volatility as a result. On the data front this week we have Swiss inflation figures released, retails sales data from Canada and we also have the Bank of Japan's monetary policy decision. Call in now to for a live market quote and further news and analysis.