Over the weekend, President Trump’s executive order banning immigration from seven countries sparked mass protests. It may strain the UK’s fledgling friendship with the new US President as Prime Minister May comes under pressure to side against travel bans.

Several key economic data points are up for release in the Eurozone and the US today. From the Eurozone, a few sentiment gauges and German inflation figures are likely to take centre stage. On the other side of the Atlantic, US personal income and personal spending data along with an update of pending home sales index will attract attention. Separately, British Prime Minister, Theresa May is set hold discussions with devolved administrations in Cardiff today.

Looking ahead, the highlight this week will be the Federal Reserve and the Bank of England’s (BoE) monetary policy meeting. In addition to this, the first US nonfarm payrolls figure under the newly elected US President, Donald Trump, is scheduled to release later this week.

Pound Sterling – UK Markets

The Pound is trading lower against the US Dollar this morning, extending Friday’s losses. The UK calendar remains devoid of economic releases today. However, data releases will pick up pace going forward with the release of Britain’s GfK consumer confidence and consumer credit along with manufacturing, construction and services purchasing managers’ indices. Next up is the week’s crucial event i.e. the BoE’s interest rate decision and inflation report. The central bank is expected to maintain status quo at this meeting. However, it will be interesting to see BoE’s take on UK’s rising inflation. Separately, British Prime Minister, Theresa May is set to hold Brexit related discussions with the leaders of devolved administrations in Cardiff today.

Last week, Sterling - US Dollar currency pair witnessed some new highs and lows as the UK Supreme court ruled that Ms. May couldn’t trigger Article 50 without a Parliamentary approval, while UK economy grew more than expected in 4Q 2016, on the back of robust services sector.

US Dollar – US Markets

The greenback is trading higher against the Euro and Sterling this morning. Later in the day, investor focus will be on a slew of economic releases, including the US personal income and personal spending data along with pending home sales and the Dallas Fed manufacturing business index. Today’s data is expected to attract significant market attention as investors look for cues that would shed light on the state of the nation’s economy.

On Friday, investors fretted over US President, Donald Trump’s new immigration ban and downbeat US economic growth data. The US economy grew less than anticipated in the final three months of the previous year. The disappointing data has likely renewed concerns that the US economy is losing momentum entering into the New Year. Further, flash reading of durable goods orders surprisingly fell in December. On the other hand, a survey by the University of Michigan revealed that US consumer sentiment unexpectedly rose in January, notching its highest level since 2004.

Euro – European Markets

The common currency is trading lower against the US Dollar and higher against the Pound this morning. Earlier today, data published by the National Statistics Institute showed that the Spanish economy grew

in-line with market expectations during the final quarter of 2016. Going forward, market attention will now gradually shift towards a string of crucial economic data releases from the Eurozone, which have the potential to influence trading activity in the Euro – US Dollar currency pair. A series of sentiment driven data in the Eurozone, scheduled in a short while, will provide additional evidence about how the economy has performed in the start of 2017. Investors would also focus on preliminary reading of German consumer price inflation figures for January, scheduled to be released later today.

On Friday, data revealed that German import prices advanced above expectations for December. In other economic news, Italian wage inflation came in flat for the same month.

Other Currencies – Highlights

The Kiwi Dollar has reversed some of its earlier gains and is trading lower against the US Dollar this morning. The domestic currency had received an upward thrust against the greenback earlier in the session, following a stronger than expected set of trade data from New Zealand. A report released by Statistics New Zealand showed that the nation’s trade deficit narrowed to a 6-month low in December, as imports dropped and exports rose above expectations. The Kiwi Dollar had ended last week on a stronger footing against the greenback, as New Zealand's state of affairs seemed robust to market participants in comparison to the

geo-political tensions in the US that left the greenback somewhat fragile.

Looking ahead, investors await the New Zealand government’s fourth quarter labour report this week. The jobless rate in New Zealand is skewed by rapidly rising population and participation in the labour market. Record immigration has helped fill some of the demand for skilled labour, but the extent of wage rise has been limited.