\u201cThe anticipated mixed employment market could bolster the Fed\u2019s intentions to remain on hold, yet the inflation print on Tuesday could sway the pendulum in either direction. Moreover, given that Fed Chair Powell\u2019s term is set to end this year, should a Fed Chair be announced in the coming week the markets may be more preoccupied with his\/her statements rather than the financial releases. Geopolitically, the US reminded US why they are No.1, but their meddling in South America could push gold prices should instability arise or further action against \u2018unfriendly\u2019 nations are taken\u201d<\/em><\/p>\n\n\n\n The UK\u2019s GDP rates for November are due to be released next Thursday and may be of interest for Cable traders. The GDP rate, although on a month-on-month basis can still provide insight into the state of the UK economy and thus should the rate showcase an improvement from the prior reading of -0.1% and imply economic growth, it may be seen as a positive for the UK economy which in turn could provide support for the sterling. However, on the other hand should the GDP rate remain in contraction territory, it could spell trouble for the UK economy and could thus weigh on the sterling. On a fundamental level, reports have emerged per POLITICO that the UK is preparing a bill establishing a legal framework for UK-EU alignment, in an attempt to reset its relationship with the EU, which could lead to some political issues down the line, yet no immediate market impact.<\/p>\n\n\n\n Analyst\u2019s opinion (GBP)<\/em><\/p>\n\n\n\n \u201cThe UK\u2019s GDP rates are interesting but not necessarily a market mover. Nonetheless, considering the situation in which the UK Labour Government has put itself in, they need a \u2018win\u2019 here and thus an improvement could provide support for the sterling, whereas a lower than anticipated figure or even a continued contraction in the economy could weigh on the pound.\u201d<\/em><\/p>\n\n\n\n On a monetary policy level, we would like to note that the BOJ is its quarterly regional report which was released yesterday stated that \u201cAll nine regions reported that their respective economies have been recovering moderately, picking up, or picking up moderately, although some weakness had been seen in part\u201d. The comments within the BOJ\u2019s report showcase that in terms of economic activity there has been some recovery, which in turn could pave the way forward for the bank to maintain their rate hiking approach. Therefore, should BOJ policymakers showcase a clear willingness to hike rates in their next meeting it may provide support for the JPY. On a fundamental level, Japan\u2019s relationship with China has continued to deteriorate as China has banned \u201cexports of dual-use items to Japan that can be used for military purposes\u201d, with Japan calling the ban \u201cabsolutely unacceptable\u201d. The continued deterioration of the relationship with China could lead to negative impacts on the Japanese economy and may have thus contributed to the weakening of the JPY. Moreover, with sources reporting that China is considering a further clampdown on exports of rare earths to Japan the JPY may be further weakened as the Japanese economy is reliant on rare earth imports from China. Hence the relationship between Japan and China warrants further monitoring as an escalation could weigh on the JPY.<\/p>\n\n\n\n Analyst\u2019s opinion (JPY)<\/em><\/p>\n\n\n\n \u201c<\/em>We see the case for sticking on their rate hike path considering the BOJ\u2019s report which emerged earlier on this week. However a trade war with China and a deterioration of Japan\u2019s relationship with a key trading partner could lead to unwanted effects on the economy. Hence, possible \u2018hits\u2019 to the Japanese economy could outweigh hawkish commentary as the BOJ\u2019s decisions could be influenced should the economy appear to be heading to a \u2018bad\u2019 place. In our view, the JPY may weaken for some time but overall with the BOJ possibly hiking rates this year, we wouldn\u2019t be surprised to see the JPY strengthening down the line.\u201d<\/em><\/p>\n\n\n\n On a fundamental note, the rotating EU Council Presidency has moved to the Republic of Cyprus which now embarks on its 6-month term. The Republic of Cyprus takes over as the EU\u2019s next seven-year budget looms and which will be decided by the end of the term in June 2026 where an EU leader summit is set to take place. Hence, some attention is warranted to any developments emerging from the island, as the EU\u2019s budget policy may influence the common currency. On a macroeconomic level, we would like to point out that France\u2019s, Germany\u2019s and the Eurozone\u2019s preliminary CPI rates for December failed to meet expectations set by economists implying that inflation may be easing in the in the Zone in general and it\u2019s two largest economies. The lower- than-anticipated inflation print may have weighed on the common currency, as the option for the ECB to cut if they wished to continues to be open. In turn should, sentiment from ECB policymakers appear to be dovish in nature, it could further weigh on the common currency. For next week, trader\u2019s may be interest in the release of the Zone sentix figure.<\/p>\n\n\n\n Analyst\u2019s opinion (EUR)<\/em><\/p>\n\n\n\n \u201cEven with the CPI rates coming in lower than expected, we are not convinced that the ECB will proceed with a rate cut in their next meeting. In our view the bank is ideally positioned at their current interest rate levels to deal with and combat inflation and a rate cut at this point may be premature, hence we wouldn\u2019t be surprised to see the overall rhetoric from the ECB noting that they are in a \u2018good place\u2019.\u201d<\/em><\/p>\n\n\n\n On a fundamental level, we should note that Australia is currently battling with an intense heatwave as temperatures have soared to above 40 degrees Celsius, leading to warnings of \u201cextreme fire danger\u201d, with the FT reporting that towns have already been evacuated and the fire risk being expected to peak today. On a macroeconomic level, we would like to note the release of Australia\u2019s CPI rates for November with the monthly indicator coming in lower than expected, which tended to imply easing inflationary pressures in the Australian economy. In turn, implications of easing inflationary pressures in the Australian economy may have aided in the Aussie\u2019s weakening against the dollar during the week. Moreover, sticking to our macroeconomic theme the nation\u2019s trade balance for November came in lower than expected but still noted a trade surplus. Nonetheless, the reduction in exports from 2.8% to -2.9% may have weighed on the Aussie considering the nation\u2019s status as an exporter of raw materials. In turn should the exports rate continue to worsen, it may be reflected in the Australian dollars price.<\/p>\n\n\n\n Analyst\u2019s opinion (AUD)<\/em><\/p>\n\n\n\n \u201cThe exports rate is a concern for Aussie traders and the negative rate posted this week may spark some concern unless an improvement is noted in the next release.\u201d<\/em><\/p>\n\n\n\n On a macroeconomic level, Canada\u2019s Ivey PMI figure for December was released this Wednesday and came in better than expected.The figure did not only exceed expectations by economists but also escaped contraction territory and now showcases an expansion of the Canadian manufacturing sector, which could be seen as a positive for the economy. Hence the better than expected figure could provide some support for the Loonie or have mitigated some of the dollar\u2019s strengthening during the week. Moreover, we should note that the time of this report the Canadian employment data for December has not yet been released and could thus change our overall stance on the state of the Canadian economy. For next week traders may be interested in the release of the Manufacturing sales rate next Friday, although considering it\u2019s low impact nature, CAD traders may be more interested in releases stemming from other nations.<\/p>\n\n\n\n![\"\"](\"\/wp-content\/uploads\/2026\/01\/image-33.png\")
<\/figure>\n\n\n\nGBP \u2013 GDP rates due out next week<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2026\/01\/image-34.png\")
<\/figure>\n\n\n\nJPY \u2013 BOJ eyes more rate hikes<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2026\/01\/image-35.png\")
<\/figure>\n\n\n\nEUR \u2013 Eurozone Sentix index to be released Monday<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2026\/01\/image-36.png\")
<\/figure>\n\n\n\nAUD \u2013 Fundamental\u2019s to lead the Aussie in the coming week<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2026\/01\/image-37.png\")
<\/figure>\n\n\n\nCAD \u2013Manufacturing sales rate due out on Friday<\/h2>\n\n\n\n
![\"\"](\"\/wp-content\/uploads\/2026\/01\/image-38.png\")
<\/figure>\n\n\n\n