Trump’s latest tariff threats dominate headlines, keeping the dollar under pressure and traders on watch as tensions continue between the US and the EU/UK. Sterling has seen recent gains but awaits important data including UK CPI for clues on BoE policy. Euro direction meanwhile remains anchored by ECB commentary and eurozone data. Political developments and central bank signals are taking precedence over fundamentals, making this a week where headlines could drive significant market moves.
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Current rates
| Currency pair | Rate |
|---|---|
| gbp usd | 1.3413 |
| eur usd | 1.1632 |
| gbp eur | 1.1530 |
Rates correct as of 12:20pm on Monday 19 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.
UK data a major driver for GBP/USD this week
GBP/USD struggled to hold onto gains last week despite UK GDP beating expectations, as markets judged the rebound to be driven by temporary factors rather than a broad-based recovery. Attention now shifts to a heavy UK data calendar, most notably Wednesday’s inflation print, which will be crucial in shaping expectations around the timing of the next BoE rate cut. Renewed Trump tariff threats over the Greenland issue are weighing on the dollar and adding volatility to the pair.
EUR/USD lifted by renewed tariff tensions as Davos takes focus
EUR/USD starts the week firmer as markets extend the now-familiar ‘sell US’ reaction to Trump’s latest tariff escalation, with trade rhetoric once again overshadowing fundamentals. With EU/US relations under renewed strain ahead of Davos this week, tariff headlines are likely to dominate price action, while PMI data and Thursday’s US core PCE provide secondary context rather than primary direction.
GBP/EUR steady as markets look to CPI and Davos commentary
GBP/EUR remains range-bound as tariff escalation weighs on both sides. As it stands there is no clear relative winner. With trade rhetoric still setting the tone, focus narrows to UK inflation for clues on BoE timing and to ECB commentary at Davos, where any shift in tone could be the catalyst needed to break the current consolidation.
Looking forward
Key dates for your calendar.
- Monday: China reports GDP. The Eurozone and Canada report CPI. The World Economic Forum begins in Davos. US public holiday.
- Tuesday: UK jobs data. ZEW Economic Sentiment Index
- Wednesday: UK reports CPI. Trump scheduled to speak in Davos. Japan Balance of Trade.
- Thursday: The US reports GDP and PCE Price Index.
- Friday: Bank of Japan interest rate decision. UK retail sales and PMI. Euro Manufacturing PMI.
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:
- EU/US Greenland issue and recent tariff threat
- UK Inflation on Wednesday
- Trump’s pick for new Federal Reserve Chair (looks to be changing course)
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.