UK: Weekly FX Market Update 9 February

GBP

• Despite UK CPI at 3.4%, the Bank of England was close to cutting interest rates last week.

• The bank’s forecasts showed inflation returning to its 2% target in April 2027 and then falling lower for much of the year.

• Prime Minister Starmer has lost his chief of staff McSweeney over the Mandelson/Epstein affair, putting the pound on the backfoot.

• With UK GDP due for release on Thursday, it could be a busy week for the Pound.

EUR

• EURUSD was also under pressure last week despite the ECB holding rates steady at 2%.

• President Lagarde said that the ECB had discussed the exchange rate at their meeting.

• Eurozone GDP on Friday can provide some motivation this week.

USD

• Forward looking US ISM Manufacturing and Services PMI data were both positive last week.

• However, both Job openings data and weekly unemployment claims showed possible weakness.

• Retail sales on Tuesday, Delayed Non-Farm Payrolls on Wednesday and CPI on Friday can show the way for the US Dollar this week.

Sun Feb 8

All Day Japanese Elections

06:40 GBP BoE Bailey Speaks

Mon Feb 9

09:30 EUR Sentix Investor Confidence

18:30 USD FOMC Waller Speaks

Tue Feb 10

13:30 USD Retail Sales

Wed Feb 11

All Day Japan Bank Holiday

13:30 USD Non-Farm Payrolls/Average Hourly Earnings/Unemployment Rate

Thu Feb 12

07:00 GBP GDP/Goods Trade Balance/Industrial Production/Goods Trade Balance/Preliminary Business Investment

13:30 USD Unemployment Claims

Fri Feb 13

10:00 EUR Flash GDP/Trade Balance

12:00 GBP MPC Pill Speaks

13:30 USD CPI