GBP vs USD: A story of oil and snow (+video)
Currencies Direct January 25th 2016 - < 1 minute read
Friday’s Office for Budget Responsibility data suggested the UK Government borrowed £7.5 billion in December – almost £4.5 billion less than in 2015. UK borrowing still looks likely to be more than what was expected for the financial year, and the volatile price of oil may make Chancellor George Osborne’s task of meeting target just that little bit harder.
We have the Bank of England’s financial stability report on Tuesday, which will be a good indicator for Sterling this week, and Thursday’s gross domestic product data will be a high priority for the markets.
Mario Draghi backed the European Central Bank for more quantitative easing on Friday, and his dovish speech allowed Sterling to claw back some of its recent losses.
We have the German IFO survey to start the day. Wednesday will be busy in the EU, with consumer confidence readings from Italy, Germany and France.
USD weathers the storm
Storm Jonas has battered major cities in US recently, with New York and Washington (among others) frozen to a standstill. It hasn’t stopped the US dollar performing well against the pound after the US Federal Reserve raised rates in December. But there are whispers that the Fed may lower the tone with dovish comments regarding its interest rates. Some were expecting a quick-fire year with numerous rates rises, but investors will be pleased to see that this is now seems very unrealistic.
Enjoy your week.