Drop for Euro in Forex Markets as Pound Clings On

German economic worries caused problems for the euro as trading kicked off for another day on Tuesday.

There are worries among some analysts that the major European economy could be about to go into a recession. This follows news last week that German industry was experiencing a downturn.

As a result, the euro went down in value. However, perhaps the most remarkable story of the day so far was the performance of the British pound. It managed to tread water as trading opened – despite the fact that British Prime Minister Theresa May faces a crucial parliamentary vote on her Brexit deal today. May postponed the vote in December when it became clear she was unlikely to win – and there’s still no guarantee she will win it this time around, either.

Despite the political uncertainty, the pound managed to stay on track, remaining in the $1.29 region against the US dollar.

Elsewhere, continued fears over whether or not the Federal Reserve will raise rates in 2019 led to the US dollar index, which measures its value compared to other global currencies, dropping 0.1%, to 95.48.

With the trading week now well underway, there’s a lot for foreign exchange traders to continue to keep their eyes peeled for.

At 1.30pm GMT today (Tuesday), for example, the US Department of Labor will release its producer price index excluding food and energy covering the month of December. This is expected to show a slight rise from 2.7% to 2.9%.

Shortly afterwards at 1.55pm GMT, the Johnson Redbook Index will be released in the US – offering an indication of year over year general merchandising store sales change.

In the evening, Japanese machinery orders data for the month of November will be out at 11.50pm GMT. This is expected to show a significant drop from 7.6% to 3.5%.

Looking ahead to Wednesday, a significant speech from the Bank of England’s governor Mark Carney is due at 9.15am GMT.

Shortly after that at 9.30am GMT, the country’s retail price index for December will be revealed. Year on year, this is expected to drop from 3.2% to 2.8%.

Overall British consumer price index information for the same month is expected at the same time. Year on year, this is forecast to also drop, but this time only from 2.3% to 2.2%.

At 7pm GMT, the Federal Reserve’s so-called “Beige Book”, which provides insights into the US economy from across the Fed’s regional districts, will be out.

On Thursday, the day will kick off with a speech from the Bank of Japan’s governor, Haruhiko Kuroda. This will take place at 3.20am GMT.

European consumer price index information for December will then come out at 10am GMT, and it is expected that year on year this will remain the same as before at 1.6%.

The weekly round of US joblessness claims will be out shortly afterwards at 1.30pm GMT. Initial jobless claims covering the week of January 11^th are expected at 1.30pm GMT, while continuing jobless claims covering the week of January 4^th are due out at the same time.