GBP

The pound has started the day with a spring in its step as UK Inflation data beat expectations for December. The figure was expected to be an improvement from a previous 0.3% to 0.5% but the realized figure was an even more improved 0.6%. Britain’s inflation rate picked up during the month of December after shoppers, albeit briefly, were allowed back into stores between lockdowns.

This figure is still well below the Bank of England target, but crumbs of comfort can be taken from the figure beating expectations. The rising prices for clothing, transport, and cultural activities were the biggest reason behind the larger than expected rise, but this was partially offset by the falling cost of food and non-alcoholic drinks.

USD

Former Fed Chair and the president's elects choice for Treasury Secretary  Janet Yellen appeared before Congress yesterday and laid out the road of pandemic relief and economic stimulus. She urged lawmakers to “act big” when it comes to the national debt, but she already faced some stiff resistance from Republican lawmakers who wish to resist ‘liberal’ economic reform. This promise to act big has boosted the risk-on atmosphere and as a result, safe-haven demand has fallen.

Key announcements

17:00 – GBP- BOE Governor Bailey Speech
17:00 – USD – Presidential Inauguration