Market watch: 15th January 2025

Greenback pulls back ahead of inflation data. Markets eagerly await the latest bout of CPI data from the US Bureau of Labour Statistics later today. The Federal Reserve will also be keeping an eye on the release, as higher than expected numbers will spoil any appetite to reduce interest rates. Before the US data however, currency traders would do well to pay attention to the UK inflation rate. The Pound Sterling has been under immense pressure recently, wicking as low as $1.21 on Monday. Confidence in the UK economy remains low and the inflation report later today could do even more damage if the numbers do not meet predictions.

Staying on the topic of inflation, the Eurozone will publish its own figures on Friday. Weakness in the Dollar allowed the Euro to reclaim $1.03 yesterday but the common currency remains in a difficult position. CPI reports are all well and good but pale in significance to what is right around the corner: the inauguration of Donald Trump. Only five days to go before the big day and talk of trade tariffs are rife, to say nothing of some of the wilder ideas being thrown around, such as the possibility of purchasing Greenland.

The prospect of fewer interest rate cuts from the Fed certainly left in a dent in asset prices over the past month or two, not least in the crypto markets. Bitcoin underwent a violent reversal on Monday however, falling all the way down to $89k before shooting back up to $97k at the time of writing.