GBP
Yesterday crude oil dropped to its lowest level since may 2009 with Iraqi and
Russian oil exports at near 35 year highs. Lower oil prices will
continue to drop inflation expectations and reduce the likelihood of an
interest rate rise in the UK.

It was a quiet news day in the UK however there was an analysts report
out  regarding their view on 2015. Roughly 400,000 jobs are expected
to be generated throughout the year, decreasing the unemployment rate down to

GBP
Yesterday crude oil dropped to its lowest level since may 2009 with Iraqi and
Russian oil exports at near 35 year highs. Lower oil prices will
continue to drop inflation expectations and reduce the likelihood of an
interest rate rise in the UK.

It was a quiet news day in the UK however there was an analysts report
out  regarding their view on 2015. Roughly 400,000 jobs are expected
to be generated throughout the year, decreasing the unemployment rate down to
its pre-recessionary levels. Economist have forecast that unemployment
will fall to 1.7m, falling back to the rate of 5.2% which has not been seen
since before the recession. Average weekly earnings are also anticipated to
grow by 2.5% potentially surpassing inflation for the whole of 2015.

EUR
Yesterday we saw the Euro reach 9 year lows mainly on the back of rumours
relating to a Greek exit from the Eurozone. Germany’s government has
insisted it wants Greece to stay in the Eurozone and will not be
blackmailed into amending the terms and conditions of the country’s
bailout. There has been rumours that the German government have tried to
manipulate the outcome of the Greek election with its warnings, but experts
have advised that this could have consequences if Greek voters decided to call
the German government’s bluff. According to experts, a Greek exit, would
be immensely expensive to Germany in particular, and could destabilise the Euro
even further.

Also in Europe, lower German inflation brought further pressures for the ECB to
introduce QE. The decline in German inflation has increased expectations that
the European Central Bank will start buying government bonds to support prices
in the Eurozone and the consensus from various analysts suggests there is a
good chance of further falls in inflation in the coming months, which again
poses the chance for further Euro weakness.

Key
Announcements:
09:30 – GBP: UK Services PMI (Dec) expected to
fall from 58.6 to 58.5
15:00 – USD: ISM Non
manufacturing PMI (Dec) expected to fall from 58.2 to 59.3

Our dealers are available via e-mail ([email protected]) or by phone (020 7220 8181).