In the upcoming trading sessions, a couple of notable surveys in the UK will be watched closely in order to evaluate the morale among consumers following the slowdown witnessed in UK’s economic growth. CBI reported sales figures due later today and tomorrow’s GfK consumer confidence data for the current month will offer clues to UK’s economic climate in early 2015.

With the Fed’s two day policy meeting drawing to an end, yesterday’s post-policy statement revealed no material change in the central bank’s stance. However, the central bank noted that inflation expectations had "declined substantially", while it reaffirmed that inflation would rise gradually towards the 2% target. Meanwhile, focus shifts to Inflation figures from Germany in order to decipher if the Euro zone’s largest economy managed to dodge deflation in January.

Pound Sterling – UK Markets

The Nationwide’s report for January released earlier today revealed that growth in UK house prices continued to decline for a fifth straight month. With recent data pointing out that the number of mortgage approvals in the UK continued to fall, traders expect activity in Britain’s housing market to remain subdued for some time. Meanwhile, the Pound has shown little reaction to today’s data, which was in line with expectations, and has remained range bound against the majors this morning. Going forward, the CBI distributive trades survey scheduled later today is anticipated to provide an early insight into Britain’s retail activity for January. This survey is expected to show that trade activity eased from December’s upbeat reading, especially considering last month’s robust festive shopping season demand. Additionally, tomorrow’s GfK survey will help investors to better gauge the health of demand among UK consumers for January.

Yesterday, the BoE Chief, Mark Carney, in an unusual intervention, urged European nations to adopt some common tax and spending policies and boost cross-border revenue transfers.

US Dollar – US Markets

The US Fed ended its two day policy meeting yesterday and kept its key interest rate unchanged at 0.25%. In the post meeting policy statement, the central bank expressed confidence about the US economy’s solid recovery going forward amid robust growth in the nation’s labour market. Additionally, the publication revealed that the impact of low energy prices on US inflation is expected to be short-lived, although policymakers will take overseas developments into consideration before deciding on the timing of an interest rate rise in the US. Meanwhile, a slightly hawkish tone in yesterday’s print strengthened prospects of a mid-2015 rate rise in the US which lifted the greenback against most of its major peers.

The US Dollar is trading in a tight range against the common currency this morning. Today’s initial jobless claimants and pending home sales data in the US will be eyed for further direction. However, the main focus among traders is likely to remain on tomorrow’s preliminary GDP data in the US which is expected to show that the economy expanded at a slower, albeit at a healthy pace, for the last quarter of 2014.

Euro – European Markets

Data released earlier today showed that the number of jobless people in Germany reduced for January, and the nation’s unemployment rate eased. The common currency is trading in a tight range against the majors this morning ahead of Germany’s crucial flash consumer price inflation report. The report is anticipated to show that consumer prices dropped for the first time since July 2009, as the impact of low energy prices continue to weigh on the nation’s inflation. Separately, considering the recent Ifo survey showing an improvement in morale among German firms, traders will eye Euro zone’s business sentiment survey today to ascertain if the improvement is more broad based, especially after the ECB recently announced its stimulus measures. Going forward, Euro investors will keep a tab on tomorrow’s preliminary inflation and unemployment data in Euro zone for further direction.

Yesterday, the Euro lost ground against the greenback following the US Fed’s policy meeting after the US Fed expressed optimism about economic growth in the nation.

Other Currencies – Highlights

The Reserve Bank of New Zealand in its policy meeting yesterday kept its key interest unchanged at 3.5%. The RBNZ Chief, Graeme Wheeler, stated that central bank’s policy stance is expected to stay unchanged in the near term. He poured cold water on hopes of an interest rate rise in the nation, especially after indicating that RBNZ would consider an upward or downward adjustment in interest rates depending on economic updates going forward. An unexpected dovish tone from the RBNZ Chief stoked speculation of an interest rate cut in New Zealand, especially after low oil prices continued to weigh on the nation’s inflationary health. This caused the Kiwi Dollar-US Dollar pair to drop sharply below the 0.73 mark. Separately, another report showed that trade deficit in New Zealand widened more than expected for December, amid a sharp rise in imports.

With no important domestic macroeconomic updates scheduled today, investors will eye tomorrow’s preliminary US GDP data for further direction to the Kiwi Dollar against the greenback.