The British Pound was the top-performing major currency in January, supported by generally positive sentiment towards global risk and a decrease in expectations for the scale of interest rate reductions that the Bank of England is expected to impose in the months to come.
Data-wise, the main highlights of yesterday’s calendar were the raft of Q4 GDP readings from the Eurozone, consisting of Spanish, Italian, French and German.
For Q4, the GDP figures indicated a declining Eurozone economy, with small growth noticed in Spain and Italy, a decrease in Germany, and stagnation in France.
The US Federal Reserve’s January policy meeting will be the focus of attention today. No change in rates is the general consensus.
As a result, the meeting statement and Fed Chair Powell’s press conference will be closely watched for clues regarding the timing of the first rate cut.