Much of the discussion revolves around USD this week, with a healthy supply of data arguably less impactful than other news. More tension between Trump and Fed Chair Powell, a pivotal Supreme Court ruling, and positive signals in UK-EU relations are among the big stories impacting currency markets. We cover this and more below.
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Current rates
| Currency pair | Rate |
|---|---|
| gbp usd | 1.3464 |
| eur usd | 1.1681 |
| gbp eur | 1.1526 |
Rates correct as of 12:25pm on Monday 12 January but may now have changed.
The Big 3
A deeper look at the performance of major currency pairs this week. Become a subscriber to receive the full reports.
Fed independence concerns weigh on USD as GBP holds firm
Improved political sentiment in UK-EU relations helped push GBP/USD to fresh highs last week, before renewed dollar strength trimmed gains. Attention now turns to non-data drivers in the US, with fresh tensions around Fed independence weighing on the dollar and injecting volatility into early-2026 trading. Read on for more of the forces impacting sterling and dollar this week.
EUR/USD finds support as US risks dominate the narrative
EUR/USD retraced sharply last week as a firmer dollar and eurozone inflation at the ECB’s 2% target weighed on sentiment. We see limited scope for a repeat move this week. With US-centric risks dominating the agenda, fiscal-driven growth expectations in Europe should help ensure recent euro weakness proves transitory. Find out what’s impacting the euro at the moment.
GBP/EUR consolidates gains as focus turns to UK GDP
GBP/EUR extended higher early last week, supported by a constructive technical backdrop and renewed optimism around UK-EU alignment, before becoming slightly overbought and retracing. With UK and eurozone data light, Thursday’s UK GDP print is the key near-term driver for sterling, while a stable ECB policy outlook suggest the euro should remain well anchored against the pound.
Looking forward
Key dates for your calendar.
- Monday: India reports CPI. Australia Consumer confidence.
- Tuesday: US inflation data.
- Wednesday: China reports trade data. US reports PPI and retail sales. The Fed publishes its beige book.
- Thursday: UK GDP MoM. Euro GDP growth.
- Friday: Germany and Italy report CPI.
Here’s what we’re talking to our clients about
We’re always here to support. Here are some of the conversations we’re having:
- US inflation data this week/UK GDP data.
- US Government threaten Fed Chair with criminal charges.
- Iran escalations and Greenland disputes.
The contents of this article do not constitute financial advice and are provided for general information purposes only. While the content is based on information believed to be accurate at the time of publication, no guarantee is provided.