Forex News
- EUR/GBP weakens as strong UK PMI and Retail Sales data lift Sterling across the board.
- BoE’s Greene strikes a cautious tone on disinflation, cooling near-term rate cut bets.
- Eurozone PMI data remain mixed, while ECB rate expectations stay anchored near 2.00%.
The Euro (EUR) weakens against the British Pound (GBP) on Friday, with the Sterling outperforming its major peers after stronger-than-expected UK economic data. At the time of writing, EUR/GBP is trading around 0.8677 after climbing to a three-week high near 0.8745 earlier this week.
Preliminary S&P Global Purchasing Managers Index (PMI) figures signaled a sharp improvement in UK business activity at the start of the year. The flash Composite PMI rose to 53.9 in January from 51.4 in December, marking the strongest expansion in private-sector output since April 2024.
The services sector led the upturn, with the flash Services PMI climbing to 54.3 from 51.4, a 21-month high, while manufacturing conditions continued to stabilize, as the flash Manufacturing PMI improved to 51.6 from 50.6, the strongest reading in 17 months.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said the January flash PMI is “indicative of a robust quarterly GDP growth approaching 0.4%.”
UK Retail Sales data also surprised to the upside. Figures from the Office for National Statistics showed Retail Sales rose 0.4% MoM in December, rebounding from a 0.1% decline in November. On an annual basis, sales accelerated to 2.5% from 1.8% (revised up from 0.6%), above market expectations of 1%.
Retail Sales excluding fuel rose 0.3% MoM in December, beating forecasts for a 0.2% decline after falling 0.4% in November, while the annual rate accelerated to 3.1% from 2.6% (revised up from 1.2%), also above expectations of 1.4%.
Comments from Bank of England (BoE) policymaker Megan Greene added to Sterling’s support. Greene said she is now less concerned about weakening demand, warning instead that the greater risk lies in a slowdown in disinflation, adding that looser Federal Reserve (Fed) policy could push UK inflation higher.
The upbeat data and Greene’s remarks have tempered near-term rate cut expectations, reinforcing the view that the BoE can afford to remain patient before easing further.
On the Euro side, preliminary HCOB PMI figures painted a mixed picture of economic momentum across the Eurozone. The flash Composite PMI came in at 51.5 in January, slightly below market expectations of 51.6 and unchanged from December.
Manufacturing PMI rose to 49.4 in January from 48.8 in December, above expectations of 49, while the Services PMI slipped to 51.9 from 52.4, missing forecasts of 52.8.
On the monetary policy front, a report published by BHH said the European Central Bank (ECB) is in a good position to keep interest rates on hold for some time. The swaps curve is pricing in a steady ECB deposit rate at 2.00% over the next twelve months.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- EUR/USD wavers below 1.1750 with the three-week highs, at 1.1768, still in sight.
- Eurozone January's flash HCOB PMIs have failed to impress.
- The US Dollar is on track for its largest weekly sell-off in months amid US-EU tensions.
EUR/USD posts moderate losses, trading right above 1.1730 at the time of writing on Friday, but holding most of the previous day's gains and on track for its strongest weekly performance since June. Eurozone's flash Purchasing Managers' Index (PMI) has failed to provide any significant support to the Euro (EUR), but the pair remains near multi-week highs, favoured by a weak US Dollar (USD), as the focus turns to the US S&P Global PMIs.
US President Trump's obsession with Greenland and the tense relations between the US and Europe attracted attention this week and sent the Greenback sharply lower across the board. Trump said on social media that he has secured total and permanent access to the Arctic island in a deal with the North Atlantic Treaty Organization (NATO), following a speech at the Davos World Economic Forum, where he backed off on the use of military action against NATO allies and withdrew threats of tariffs to the Eurozone countries.
On the macroeconomic front, US Q3 Gross Domestic Product (GDP) figures beat expectations on Thursday, weekly Initial Jobless Claims rose less than expected, and the Personal Consumption Expenditures (PCE) Price Index revealed higher inflationary pressures in November These figures endorse the US Federal Reserve's (Fed) view of steady interest rates, the US Dollar, however, remained depressed.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.09% | -0.19% | -0.17% | -0.06% | -0.21% | 0.03% | 0.11% | |
| EUR | -0.09% | -0.28% | -0.26% | -0.15% | -0.30% | -0.06% | 0.01% | |
| GBP | 0.19% | 0.28% | 0.02% | 0.13% | -0.03% | 0.22% | 0.29% | |
| JPY | 0.17% | 0.26% | -0.02% | 0.13% | -0.04% | 0.20% | 0.28% | |
| CAD | 0.06% | 0.15% | -0.13% | -0.13% | -0.16% | 0.08% | 0.16% | |
| AUD | 0.21% | 0.30% | 0.03% | 0.04% | 0.16% | 0.25% | 0.32% | |
| NZD | -0.03% | 0.06% | -0.22% | -0.20% | -0.08% | -0.25% | 0.07% | |
| CHF | -0.11% | -0.01% | -0.29% | -0.28% | -0.16% | -0.32% | -0.07% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily Digest Market Movers: EU-US tensions hit the US Dollar
- The US Dollar Index (DXY) languishes near three-week lows as the deterioration in the relationship between the US and the EU, its main trading partner, amid the Greenland issue erodes confidence in the US as a global leader and the status of the US Dollar as a reserve currency.
- Market sentiment improved after Trump softened his tone toward the European Union, which allowed for a relief rally. Transatlantic relations, however, have been severely damaged, and the US Dollar is taking the brunt of it, at least for now.
- Eurozone flash PMIs revealed that the Services sector expanded at a 51.6 pace in January, unchanged from December, against the 51.6 market consensus. The manufacturing PMI improved to 49.4 from 48.8 in December, bearing expectations of a 49.0 reading, yet still at contraction levels below 50.
- German PMIs, released earlier on Friday, came out better than expected. The services sector's activity improved to 53.3 from 52.7 in the previous month, above market expectations of a milder increase to 53.0. The Manufacturing PMI rose to 48.7 from 47.0, beyond the market expectations of a 48.0 reading, but also at levels indicating contraction.
- US macroeconomic data were USD-supportive on Thursday. The US Q3 GDP was revised up to 4.4% annualized growth, from the previous 4.3% estimate, and also above the 3.8% growth seen in Q2.
- The US PCE Price Index accelerated 2.8% year-on-year in November from 2.7% previously, as widely expected. The core PCE Price Index showed an identical performance.
- Beyond that, US Initial Jobless Claims rose to 200K in the week of January 17, from the upwardly revised 199K the previous week, still well below the 212K anticipated by the market.
- In the US, the S&P Global preliminary Services PMI is seen ticking up to 52.8 in January from 52.5 in December.
Technical Analysis: EUR/USD remains capped below resistance at the 1.1765 area
EUR/USD is consolidating between the 61.8% and the 72.6% Fibonacci retracement levels of the early January sell-off, keeping the pair's immediate bullish structure intact.
Technical indicators point to a mild positive trend. The Relative Strength Index (RSI) flatlined above 60, and the Moving Average Convergence Divergence (MACD) histogram is contracting but still positive, all in all hinting at a moderate bullish momentum.
On the downside, intraday lows are at the 1.1725 area, although there is no clear support ahead of Thursday's low at 1.1670. Above the mentioned 1.1765 (January 2 and 20 highs), the next target is the December 24 high, at 1.1808.
(The technical analysis of this story was written with the help of an AI tool.)
Economic Indicator
S&P Global Manufacturing PMI
The S&P Global Manufacturing Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US manufacturing sector. The data is derived from surveys of senior executives at private-sector companies from the manufacturing sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity in the manufacturing sector is generally declining, which is seen as bearish for USD.
Read more.Next release: Fri Jan 23, 2026 14:45 (Prel)
Frequency: Monthly
Consensus: 52.1
Previous: 51.8
Source: S&P Global
Economic Indicator
S&P Global Services PMI
The S&P Global Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector. As the services sector dominates a large part of the economy, the Services PMI is an important indicator gauging the state of overall economic conditions. The data is derived from surveys of senior executives at private-sector companies from the services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for USD.
Read more.Next release: Fri Jan 23, 2026 14:45 (Prel)
Frequency: Monthly
Consensus: 52.8
Previous: 52.5
Source: S&P Global
US flash PMI Overview
The preliminary United States (US) S&P Global Purchasing Managers’ Index (PMI) data for January is due for release today at 14:45 GMT.
According to preliminary estimates, the US Composite PMI expanded at a faster pace due to an improvement in both manufacturing and the service sector activity. In December, the Composite PMI came in at 52.7.
Flash US Services PMI is expected to come in at 52.8, higher than 52.5 in December. The Manufacturing PMI is seen rising to 52.1 from the prior reading of 51.8.
Signs of strength in the US private sector activity would be favorable for the US Dollar (USD), while weak numbers would act as a drag.
How could US flash PMI affect EUR/USD?
EUR/USD trades subduedly near 1.1738 at the time of writing. The major currency pair trades within a Symmetrical Triangle on the daily chart, indicating broader volatility contraction. The price is close to the upper boundary of the volatility contraction pattern around 1.1770, which is plotted from the multi-year high of 1.1919 posted on September 17.
The 20-day Exponential Moving Average (EMA) at 1.1689 edges higher and holds below the price, supporting the rebound. Its slope has turned up, reinforcing the near-term tone.
The 14-day Relative Strength Index (RSI) at 57 (neutral) has eased from recent highs yet remains above the midline, keeping momentum steady.
Looking up, the pair could advance towards 1.1800 and 1.1900 following a decisive breakout of the January 20 high at 1.1769. On the downside, the 20-day EMA will act as key support for the pair.
(The technical analysis of this story was written with the help of an AI tool.)
(This story was corrected on January 23 at 13:09 GMT to say that the 20-day EMA will act as key support on the downside, not on the upside.)
Economic Indicator
S&P Global Services PMI
The S&P Global Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector. As the services sector dominates a large part of the economy, the Services PMI is an important indicator gauging the state of overall economic conditions. The data is derived from surveys of senior executives at private-sector companies from the services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for USD.
Read more.Next release: Fri Jan 23, 2026 14:45 (Prel)
Frequency: Monthly
Consensus: 52.8
Previous: 52.5
Source: S&P Global
- Gold eases from $4,967 record highs but remains above previous highs at $4,888.
- Downside attempts on Gold remain limited amid broad US Dollar weakness.
- XAU/USD technical indicators remain consistent with a firm upside bias.
Gold’s (XAU/USD) is trading at $4,915 at the time of writing, practically flat on the daily chart following a 4-day rally that brought price action to a fresh all-time high of $4,967. The precious metal, however, maintains its broad bullish tone intact, on track for a 6.5% weekly gain.
Precious metals remain underpinned by a weak US Dollar, as the deterioration of the US-EU relationship amid the Greenland feud has eroded the US's image as a global leader, triggering a "Sell America" trade. Trump eased the tone toward Europe at the Davos Forum and touted an agreement with NATO on the Arctic Island, but restoring the confidence of the US's main trade partner will be difficult.
Technical analysis: Gold stands comfortably above previous highs
XAU/USD has pulled back from its highs but remains above previous highs, at the $4,880 area. Technical indicators are turning lower, yet still at levels consistent with bullish momentum, with the 100-period Simple Moving Average (SMA) rising steadily, with price holding well above it.
The Moving Average Convergence Divergence (MACD) histogram in the 4-hour chart remains positive despite a moderate contraction. The Relative Strength Index (RSI) eases, pulling back from overbought levels, all in all pointing to a healthy correction following the recent sharp rally.
Bulls have been halted at the 127.2% Fiboonacci expansion of the January 16-21 rally, at the $4,970 area, ahead of the $5,000 psychological level, which is likely to challenge the strength of the current rally. On the downside, immediate support is the previous record high, at $4,888, ahead of the January 21 low of $4,775.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.31% | -1.29% | 0.28% | -0.94% | -2.64% | -2.78% | -1.29% | |
| EUR | 1.31% | 0.02% | 1.60% | 0.37% | -1.35% | -1.49% | 0.02% | |
| GBP | 1.29% | -0.02% | 1.35% | 0.36% | -1.37% | -1.51% | 0.00% | |
| JPY | -0.28% | -1.60% | -1.35% | -1.20% | -2.89% | -3.02% | -1.54% | |
| CAD | 0.94% | -0.37% | -0.36% | 1.20% | -1.69% | -1.84% | -0.35% | |
| AUD | 2.64% | 1.35% | 1.37% | 2.89% | 1.69% | -0.14% | 1.39% | |
| NZD | 2.78% | 1.49% | 1.51% | 3.02% | 1.84% | 0.14% | 1.54% | |
| CHF | 1.29% | -0.02% | -0.01% | 1.54% | 0.35% | -1.39% | -1.54% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
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