The British Pound has been the smallest loser so far this year against the US dollar, with GBPUSD shedding less than 1%.
Scheduled events and data releases on the economic calendar this week could have a major say on whether Sterling can retain top spot among its G10 peers.
Bloomberg’s FX model predicts a 74.5% chance that GBPUSD will trade between the 1.2588 – 1.2861 range this week.
Traders and investors will be sizing up each data release to inform them as to the Bank of England’s (BOE) interest rate outlook for this year.
Events Watchlist
Tuesday, January 16: UK November unemployment, December jobless claims
Despite the GDP rebound in November, markets are still mindful that the UK economy may see a technical recession. If the incoming UK jobs data adds to the gloom, that could drag GBPUSD below its 21-day simple moving average (SMA) and into sub-1.2700 waters.
Wednesday, January 17: UK December CPI
Economists forecast that UK consumer price index (CPI) would ease lower: December’s headline and core CPIs to ease lower to 3.8% and 4.9% respectively – both slightly lower than November’s year-on-year figures. However, higher-than-expected inflation that hinders the BOE from lowering rates to support the UK economy, may help boost GBPUSD towards 1.2800.
Friday, January 19: UK December retail sales
Noting the existing fears surrounding the UK economy, December’s retail sales are expected to have shrunk by 0.5% compared to November (month-on-month). Further evidence of a worsening UK economy, which in turn hastens BOE rate cuts, could weigh on Sterling and potentially bring GBPUSD closer to its 50-day SMA by then.
Here’s comprehensive list of other key economic data and events due this week:Monday, January 15
Tuesday, January 16
Wednesday, January 17
Thursday, January 18
Friday, January 19
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