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Pound Mixed as Partygate Scandal Drags on The Pound (GBP) found itself trading in a mixed range throughout January as a range of economic data from the UK revealed that the country is still feeling the affects of the coronavirus pandemic. Whilst the economy continues to grow, albeit at a slow pace, a weak retail sales reading dented the appeal of Sterling towards the end of the month.

Heading into February, all eyes will look towards the latest Bank of England (BoE) interest rate decision. Although no rate hikes are expected, investors will be focusing on the tone the bank takes moving forward. The ongoing Partygate scandal will also be looked at by Pound traders, the full Sue Gray report is not expected until the conclusion of Met Police investigations.

Euro Struggles on Rising Geopolitical Tensions The Euro (EUR) found itself struggling throughout the start of 2022 as coronavirus concerns and rising geopolitical tensions weaken the appeal of the single currency. However, a risk-off market mood limited any major losses for EUR exchange rates.

Much like in the UK, all eyes will be kept on the latest European Central Bank (ECB) interest rate decision at the beginning of February. If the bank continues to reiterate its dovish tone towards the Eurozone economy, the Euro could find itself grappling to hold onto any meaningful gains across the board.

US Dollar Strengthens on Risk-Off Mood The US Dollar (USD) strengthened during January on the back of a risk-off global market mood and a hawkish outlook from the Federal Reserve. The Fed all but confirmed rate hikes as soon as March, as the central bank looks to combat rising inflation across the US.

Markets will again turn their attention to a range of economic data including employment and retail sales figures from the US to drive movement in the ‘Greenback’. The US’s response to the Ukraine-Russia tensions will also be looked at by US Dollar traders through February.

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