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Sterling To Move Higher, US Inflation Data Also Eyed

Sterling To Move Higher, US Inflation Data Also Eyed

The Pound to Euro exchange rate hit the ground running in the opening week of the new year and may attempt a move above the nearby 1.20 handle. Further Sterling momentum however, could be difficult in light of a recently resilient performance from the single currency.

The pound was quick out of the blocks when rising against all other major currencies last week, taking a tentative lead for the fledgling year of 2022 and coming close to the 1.20 against the Euro for the first time since opening the scenes of the coronavirus pandemic.

In level terms, the slightly firmer tone to sterling sees GBP/EUR start this week at 1.1985 whilst GBP/USD changes hands in the top half of 1.35 – 1.36. EUR/USD is currently operating near the heart of the 1.13 – 1.14 band. 

This week, the main data highlights are once again from the US. CPI inflation for December will garner close attention, with both the headline and core rates set to rise further with US retail sales and industrial production also due. In the UK, GDP is expected to show the economy regained some momentum in November whilst over in Europe,  industrial production, unemployment and German GDP data will all feature.

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