Key Market Movers This Week: UK Inflation Data, US CPI, and China’s GDP in Focus
Market Report Week Commencing 13th January 2025
| Currency Pair | Mid-Market Rates |
|---|---|
| GBP – USD | 1.2164 |
| GBP – EUR | 1.1892 |
| GBP – AED | 4.4680 |
| GBP – CNY | 8.9201 |
| EUR – USD | 1.0228 |
| Country | Interest Rate | Inflation |
|---|---|---|
| UK | 4.75% | 2.6% |
| US | 4.5% | 2.7% |
| Eurozone | 3.15% | 2.4% |
| UAE | 4.4% | 3.01% |
| China | 3.1% | 0.1% |
UK
- Wednesday – Consumer Price Index: This is the leading indicator of inflation in the UK, but there is no consensus yet on where it will come in compared to the previous 2.6%. If it increases, it would imply a quicker rise in interest rates. However, a drop to the UK’s 2% target would indicate a looser monetary policy. A rise in this figure will strengthen the GBP, while a drop will weaken it.
- Wednesday – Producer Price Index (output): This is a monthly measurement of price changes in goods produced by UK manufacturers. The previous reading was -0.6%, with no consensus on the upcoming figure. A high reading is considered bullish for the GBP, while a low reading is bearish.
- Wednesday – Retail Price Index: Another measure of inflation that reflects the cost of living in the UK. It is expected to rise from 3.6% to 3.7%, which would be bullish for the GBP. A drop would weaken the currency.
- Thursday – Gross Domestic Product (MoM): Expected to rise from -0.1% to 0.2%. This measures the total value of goods and services in a given period, making it a key indicator of economic activity. A higher reading, as expected, would be bullish for the GBP.
- Friday – Retail Sales (MoM): This measures the volume of goods sold by retailers directly to end customers in Great Britain. It is expected to rise from 0.2% to 0.4%, which would strengthen the GBP.
US
- Tuesday – Producer Price Index: Measures average price changes in primary markets of the US by producers of commodities at all stages of processing. It is expected to drop from 0.4% to 0.3%, which would weaken the USD.
- Wednesday – Consumer Price Index (YoY): Compares the prices of goods in the reference month to the same month a year earlier. As a key indicator of inflation in the US, it is expected to rise from 2.7% to 2.8%, which would strengthen the USD.
- Thursday – Retail Sales: A leading indicator of consumer spending, which significantly impacts GDP. It is expected to drop from 0.7% to 0.5%, leading to further USD weakness.
- Donald Trump assumes office on Monday, 20th January.
EU
- Thursday – Monetary Policy Meeting Accounts: These accounts provide an overview of financial market, economic, and monetary developments.
- Friday – Core Harmonized Index of Consumer Prices: Measures changes in the prices of a representative basket of goods and services in the European Monetary Union. It is expected to remain flat at 2.7%. A rise would strengthen the Euro, while a drop below 2.7% would weaken it.
China
- Monday – Trade Balance (USD): Reflects the balance between exports and imports of goods and services. A positive value indicates a trade surplus, while a negative value indicates a trade deficit. It is expected to rise from $97.44B to $99.8B, strengthening the CNY.
- Friday – Gross Domestic Product: Measures the total value of goods and services produced in China during a given period. GDP is the main measure of China’s economic activity and is expected to rise from 4.6% to 5.1%, which would strengthen the CNY.
- Friday – Retail Sales: Measures the value of goods sold by retailers in China on a monthly basis. It is expected to rise from 3% to 3.5%, which would also strengthen the CNY.
UAE
- Wednesday – S&P Global Manufacturing Purchasing Managers’ Index: This economic indicator is based on monthly reports and surveys from private-sector manufacturing firms. It rose in December from November’s 54.2 to 55.4. While there is no consensus, a further rise would strengthen the AED, and a drop would weaken it.
At Currency Global, we are dedicated to helping businesses and individuals effectively manage foreign exchange risks through expert insights, personalised guidance, and tailored strategies. If you have upcoming currency needs or are interested in placing live limit orders to capitalise on potential short-term market fluctuations in the next two weeks, please reach out to one of our consultants at 020 3876 5432.