|The UK once again leads the week in terms of important data releases with Sterling skewed to the downside..
|The UK/£ made light work of last week's potential hazards with the various forecasts ringing true. This week sees some slightly less risk events ahead, but as always anything can happen with data.
First up is wage data tomorrow morning, which is expected to see the UK unemployment rate rise by 0.1% (no cause for concern). More importantly though, average earnings are expected to drop further and if the case, will help inflation fall faster (good news for the consumer, bad news for GBP).
The main event of the week sees the latest round of UK inflation. The last 2-months saw the headline figure decrease more than expected and that could be the case again. The more important core inflation number is forecast to maintain its slow path downwards.
Finally, Friday sees retail sales numbers which apart from last month, have been awful for the whole of 2023. December's result is expected to show a strong rebound and so the Sterling 'could' end the week positively, regardless of what happens between now and then.
It's yet another quiet week for the single currency data-wise and is in need for some volatility to be honest to kick-start its year. ECB President Lagarde is giving speeches all week that will be watched closely, especially after her comments last Friday on interest and inflation rates for the region this year.
Retail sales is the only major release out of the US this time round and so the Dollar will be moved by events elsewhere. Many analysts are predicting a slight retreat for the £-$ this week, but the same could have been said of last week, so we remain on the fence for this pair.