US dollar strength expected to continue | Smart Daily Currency Note

Sterling

Sterling performed relatively well on Friday, in spite of a sharp drop on very poor retail sales data released in the morning, it pared back all the losses to make gains across the board. The retails figures showed that the recent Christmas sales period was the second worst over the past fifteen years. The big story this week will be the release of the minutes from last week's Monetary Policy Committee meeting on Wednesday; the key question being whether the nine members remain unanimous in holding interest rates and asset purchasing as is. Last week the Governor of the Bank of England said that if necessary more will be done, but that monetary policy is not a panacea and has limits to its efficacy. The ground may have been prepared, therefore, for some disparity of opinion - if we do see some, expect markets to react taking a position ahead of possible future changes. Get in touch now for the latest news and prices. 

Euro

This week should be a volatile one for the euro, with influential data released on most days. However, if recent trends are anything to go by, it is output from the central bank that influences exchange rates more than anything at the moment so the President of the European Central Bank speech today will set the tone for the week. Last time he spoke he was unusually negative about the outlook for the Eurozone, and with a swathe of poor data out last week he seems likely to continue on that theme. With markets seemingly waiting on his every word, if the theme does continue, expect the euro to weaken. Later in the week, an economic sentiment survey and detailed manufacturing data are released from Germany. Given the poor GDP data last week, it would seem likely that these could disappoint which would be negative for the euro. Get in touch now for the latest news and an up to the second quote. 

US dollar

In the US on Friday, the empire state manufacturing index came out much better than expected and consumer sentiment figures also beat expectations. It is a bank holiday in the US today in observance of Presidents' Day, so you can expect liquidity to be thinner than usual during US trading hours. There is a raft of important data released later this week, this include the  minutes from the most recent monetary policy meeting from the Federal Open Market Committee (FOMC), two sets of key inflation data and we will also see more manufacturing data released. Call in now for the latest update on the US dollars movements. 

Worldwide

Elsewhere, the G-20 meeting in Moscow was the talk of traders on Friday following recent comments about supposed 'currency wars'. One direct effect of the meeting saw the Japanese yen continue to fall against the US dollar. In the closing statement after the meeting the finance ministers said that "G-20 countries have always held the position that currency policy should be based on market conditions"; however, the issue will always be a grey area when central banks decide to increase the level of monetary easing. Canada saw some unimpressive manufacturing data released which caused the Canadian dollar to weaken off, the Swedish Krona also weakened against most of its major partners; but, the New Zealand dollar performed well after impressive retail sales figures were released. This week we have the minutes from the most recent monetary policy meetings in both Australia and Japan; furthermore, from Canada we will see the release of key inflation data alongside retail sales figures. Call in now for a market update and a live quote.