GBP 

Mark Carney made a speech on Friday stating that the UK economy
has not yet reached ‘escape velocity’. He also stated that the BoE will update
its forward guidance on future interest rate rise as the Bank was not
expecting the rate to fall to 7% for another two years. Carney was quick to
reaffirm that the Central Bank would not carry out an interest rate hike in the
nearest future, as there was “no immediate need” for such a move.

GBP 

Mark Carney made a speech on Friday stating that the UK economy
has not yet reached ‘escape velocity’. He also stated that the BoE will update
its forward guidance on future interest rate rise as the Bank was not
expecting the rate to fall to 7% for another two years. Carney was quick to
reaffirm that the Central Bank would not carry out an interest rate hike in the
nearest future, as there was “no immediate need” for such a move.

The
pound fell from a 2 ½ year high against the dollar as Carney also commented
that the currency’s strength may harm exports and reaffirmed
that the Central Bank would not carry out an interest rate hike in the nearest
future, as there was “no immediate need” for such a move.

The
pound also weakened after the British Bankers’ Association revealed on Friday
that U.K. mortgage approvals rose by 46,500 in December, less
than the expected 47,200 increase.

EUR

European
Central Bank President Mario Draghi
made a speech on Friday evening commenting of a “dramatic” improvement in the
health of the euro area economy and that inflation will gradually return to the
target of under 2%.

Draghi stated “What we have been seeing in the past three or
four months is both the improvement in financial markets and that our
accommodative monetary policy is finally being passed through to the real
economy”. As a result the euro drove higher against the US dollar and finished
the week higher against the pound.

CAD

Canada’s annual inflation rate climbed to
1.2% in December from 0.9% in November, largely due to higher gasoline prices,
but remained well below the Bank of Canada’s 2.0% target. The data gave the Canadian
dollar some much needed respite after falling to fresh 4 year lows against the
pound earlier on in the week.

Today

Data
this morning from Germany has revealed that IFO Business Climate and
Expectations both improved for January giving the euro some support in early
morning trade.

Key Announcements:

13.58pm
– USD – Markit Services PMI (Jan): Expected to increase to 56.2.

15.00pm
– USD – New Home Sales (Dec): Expected to fall to 457,000.

15.30pm
– USD – Dallas Fed Manufacturing Business Index (Jan): Previously at 3.1.