Published: 23/01/2026 By ECAP
FIRM FINISH
The British Pound is ending the week on the front foot after UK retail sales surprised to the upside in December. Stronger consumer spending has helped ease concerns about near term economic weakness and reduces pressure for any immediate policy change. The data has helped the Pound hold firm after a recent struggle against the Euro. Attention now turns to January PMI data due this morning, while political developments in the UK remain in focus and may add a layer of uncertainty.
The Euro is in focus this morning with German and Eurozone flash PMI data due. Expectations point to a minor improvement in overall business activity, driven mainly by services, while manufacturing remains in contraction. Any upside surprise would support the Euro though today, though recent gains have been uneven. With broader risk sentiment still fragile, the single currency remains sensitive to data surprises rather than conviction buying.
The US Dollar is mixed as markets digest the US administration’s retreat from earlier tariff threats linked to Greenland. The sharp equity sell-off earlier in the week appears to have influenced the change in tone, reinforcing the view that market reaction still matters. While improved sentiment has steadied equities, the Dollar has struggled to regain momentum, with investors wary of renewed policy volatility and headline risk going into next week.
Data supplied by GC Partners