This week’s market report from Orbis Exchange

Key Points 

• CIPS Services PMI data out in the UK
• Global Composite PMI out in the EUR
• GDP Figures out in the US

GBP

Last week was the Pound best performance so far this year, we saw an overall increase of 2% against the USD and just under 2% against the EUR, giving us highs we haven’t seen against the USD since June 2022. This was because we saw a small drop in the inflation levels in the UK, a drop to 10.5% from 10.7%.Although the inflation levels have fell, it may not be a significant enough fall to prevent further interest rate rises. This week we have the CIPS Services PMI Data being released, this is an indicator of the economic situation in the UK service sector, should we see a reading of above 50 then this shows expansion and could positively affect the Pound, but should the reading be below 50 showing contraction then this could be seen as bearish for the Pound. 

EUR

Last week we had HICP data being released in Germany and the Eurozone, this showed no changes in the inflation levels in either. Also some growth forecasts for the Eurozone indicated they may not see as severe a recession with decreasing gas prices. We saw the EUR/USD rate reach highs we haven’t seen since April 2022. This week we have the Global Composite PMI out, this is based on manufacturing and services companies, a reading above 50 is seen as positive for the EUR but if we see a result under 50 then this could have a negative effect on the EUR quotes. We will also be monitoring the situation in Germany where there is pressure to gift Ukraine Leopard Tanks which could see further escalation in the conflict. 

USD

The USD was the weakest out of its competitors last week dropping against both the GBP and USD, a factor in this would’ve been the retail figures we had released for the month of December, against expectation we saw a drop in these figures, this is where we saw the biggest drop in the week for USD quotes. This week we have GDP figures being released towards the end of this week, should we see a drop in the figures then this can be seen as negative for the USD, but should we see a rise in the figures then this can be bullish for the Dollar. We also have Durable goods orders being released at the same time, as these products often involve large investments they are sensitive to the US Economic situation, should we see a rise in the data then this can be positive for the USD but if we see a drop in the figures then this could negatively affect the Dollar quotes.