In the past week, sterling and the euro have both found support from easing geopolitical tensions and pockets of resilient domestic data. The dollar, on the other hand, remained weighed down by policy uncertainty and questions around Fed independence, alongside very minor intervention risks. With European data light and an FOMC meeting this week, near-term FX direction looks increasingly USD-driven despite stretched technicals in some pairs.
Current rates
| Currency pair | Rate |
|---|---|
| gbp usd | 1.3652 |
| eur usd | 1.1844 |
| gbp eur | 1.1526 |
Rates correct as of 12:50pm on Monday 26 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.
Strong UK data supports sterling as dollar headwinds persist
GBP/USD traded higher last week, underpinned by stronger UK data. There was an upside surprise in inflation and a standout services PMI, which all helped push a February BoE rate cut off the table, though March remains in play. The dollar stayed under pressure as tariff threats eased, Fed independence concerns lingered and speculation around FX intervention resurfaced, with this week’s FOMC meeting now the key risk event to look at.
Euro strength builds as markets look toward central banks
EUR/USD posted outsized gains last week as the removal of Trump’s Greenland tariff threat and broader dollar weakness lifted the pair, with supportive PMI data adding to euro momentum. With little European data due, near-term direction looks dollar-led ahead of this week’s FOMC and next week’s ECB meeting, though stretched technicals suggest scope for short-term consolidation.
GBP/EUR rangebound amid supportive UK data and steady euro
The strong UK services PMI, retail sales, and slightly higher inflation, meant GBP/EUR traded in a narrow range last week. The removal of Trump’s Greenland tariff threat boosted both currencies, while solid eurozone and German PMI data maintained a constructive backdrop ahead of next week’s ECB meeting. With few scheduled releases this week, price action is expected to remain rangebound.
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:
- Tariff and retaliatory Tariff USD impacts
- UK inflation impact on interest/debt and currency
- Geopolitics – Greenland and evolving relationships with US
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.