US Inflation and Delayed Data to Drive Exchange Rates.
Summary:
US Inflation Verdict (Tuesday): The critical event of the week is Tuesday’s release of the December Consumer Price Index (CPI). This up-to-date inflation reading will directly impact US Dollar exchange rates and Federal Reserve expectations.
Delayed US Data (Wednesday): Due to schedule adjustments, markets receive a rare mid-week catch-up of November data on Wednesday, with both Retail Sales and the Producer Price Index (PPI) set for release.
UK Growth Update (Thursday): For those holding Sterling, the key moment is Thursday morning, when the ONS releases the monthly GDP estimate for November, providing a health check on the British economy.
The second full trading week of January brings a complex mix of economic data. Investors are navigating a schedule where "real-time" inflation figures (December CPI) clash with "lagged" activity data (November Retail Sales) just 24 hours later. For individuals and businesses looking to transfer funds, this creates two distinct windows of volatility: Tuesday afternoon for the US Dollar, and Thursday morning for the Pound.
Sterling is expected to remain range-bound against the Euro and Dollar until Thursday. The primary catalyst is the release of Monthly GDP figures for November, scheduled for 07:00 GMT on January 15. The market is looking for evidence that the UK avoided stagnation in late 2025. A positive growth reading would likely support the Pound, offering better exchange rates for sellers of Sterling. Conversely, a contraction would weigh heavily on the currency, potentially improving the buy rate for those purchasing GBP.
For the US Dollar, Tuesday is the decisive session. The December CPI report (released at 13:30 GMT) is the most current inflation metric available. If this data shows that price pressures remained high at the end of 2025, the US Dollar will likely strengthen, increasing the cost of international payments into USD. The picture becomes murkier on Wednesday, when the Census Bureau finally releases the delayed Retail Sales and PPI data for November. While dated, strong consumer spending numbers would reinforce the Dollar's strength.
The Euro faces a quiet week domestically, with the only notable release being Industrial Production figures for November on Wednesday. This leaves the single currency largely at the mercy of US Dollar movements. If US inflation data on Tuesday surprises to the upside, we expect the Euro to weaken, potentially opening a window of opportunity for those looking to buy EUR with USD.
Events to Watch This Week:
Tuesday, January 13: US Consumer Price Index (CPI) for December
Wednesday, January 14: US Retail Sales (November) & US Producer Price Index (PPI) for November
Thursday, January 15: UK Monthly GDP (November) & UK Trade Balance
Friday, January 16: US Import/Export Prices
Planning Your Transfers: If you need to buy US Dollars, be aware that a strong CPI reading on Tuesday could make the exchange rate less favourable immediately after 13:30 GMT. For Sterling transfers, Thursday morning’s GDP release is the critical pivot point; those with flexible timelines may wish to see if the data supports a stronger Pound before executing their trades.
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