Sterling regained its footing on a sleepy first day of trading after Christmas. The pound recorded small advances over its competitors, although the lack of any meaningful data made it hard to get a sense of the broader direction.
A cautious but improved risk appetite allowed the pound and the euro to make some small gains at the US dollar’s expense. However, that trend may reverse should any major geopolitical moves prompt a flight to safe-haven currencies.
Profits made by Chinese industrial companies dropped by 4.7% on an annualised basis in November. The subdued numbers point to ongoing troubles in the Chinese economy, which include insipid consumer demands, some uninspiring government stimulus measures and a near collapse in the housebuilding sector.
Russian president Vladimir Putin warned Europe that gas prices would surge after an agreement allowing Russian gas to pass through Ukraine expired. European leaders are bracing for higher wholesale prices, which could feed through immediately after the deal expires on New Year’s Day.
Little of note otherwise passed across the ticker last week as once busy currency markets attended to seasonal, domestic delights. The flow of economic news picks up again from this week, although it won’t be until next Monday that the regular cadence is resumed.
In the meantime, there are some more manufacturing numbers from China to look at tomorrow. Friday then sees German unemployment and US ISM manufacturing data, in what are by far and away the two largest economic events of the week.
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