Preliminary GDP data for the October – December period released just now has indicated that the UK economy modestly grew from the third quarter, while growth eased to 1.9% from a year ago. The latest fourth quarter growth estimates suggest that the economy has continued its reliance on the services sector for growth. In a few hours, the Confederation of British Industry is expected to release a sales survey report, which is forecast to show that the headline retail sales balance in January was slightly off from the prior month.

In Europe, flash German inflation data and the Euro zone’s economic sentiment numbers are scheduled for release today. Across the Atlantic, attention will now shift from the recent Fed outcome to a string of major US economic releases including durable goods orders, jobless claims and pending home sales data.

Pound Sterling – UK Markets

The just published UK GDP figures showed a decline in annual growth in the final three months of 2015, though quarterly expansion quickened from a slow pace in the fourth quarter. The preliminary GDP data in the final quarter of last year showed that economic activity picked up modestly from the previous quarter, driven entirely by growth in the nation’s services industry. But with recent persistent worries about a slowing growth in China and the wider global economy, there is significant uncertainty about Britain’s performance and hence little pressure on the Bank of England to raise the benchmark interest rate from a record bottom low of 0.50%. The Pound – US Dollar currency pair has picked up pace following the publication of the UK GDP data for the fourth quarter.

In the session ahead, the CBI’s distributive trades’ survey, which charts retail activity, could offer further insights as to whether consumers began to worry about bad economic signals at the start of 2016. Last week, retail sales figures for the key Christmas period were a disappointment indicating that shoppers were reluctant to spend.

US Dollar – US Markets

The US Dollar traded weaker against most of the major currencies yesterday following the US Fed’s dovish tone in its monetary policy meeting. The US Fed kept interest rates unchanged, while hinting that a rate increase in March remains a possibility. The central bank highlighted concerns about global economic growth and a month long plunge in global equities which could act as a drag on US economic growth. However, the central bank gave no indications about changing the course on its rate-rise path ahead. In economic news, data showed that new home sales in the US rose more than expected for December driven by employment gains and attractive mortgage rates.

Earlier today, the greenback had regained most of the lost ground against the Euro. But as of now, the US Dollar has again nudged lower against its key peers ahead of a slew of domestic economic releases. Following mixed economic indicators earlier this month in the US, data scheduled for release today which includes initial jobless claims, durable goods orders and pending home sales, will provide fresh indications about the health of the US economy.

Euro – European Markets

Earlier today, the Euro – US Dollar currency pair had ceased its three-day winning streak. But the pair sharply rebounded and spiked above the 1.09 mark this morning, following the release of upbeat Spanish unemployment data. Data published earlier in the day revealed that the jobless rate in Spain ticked lower than market expectations for the final quarter of 2015, to record its lowest level since the second quarter of 2011.

In the meantime, market attention will now gradually shift towards a string of crucial economic data in Europe which has the potential to influence further trading in the currency pair. A series of sentiment data in the Euro zone, scheduled in a short while, will provide additional evidence about how the economy has performed at the start of 2016. Earlier this month, flash data for the Euro zone’s consumer confidence indicator had ticked lower than market expectations for January. Though no change is expected in today’s revised data, a sharp downgrade in sentiment will point to further weakness in the weeks ahead. Also, the January German CPI figures, due later today, could show the effect of the recent slump in oil prices.

Other Currencies – Highlights

Earlier in the session, the US Dollar - Japanese Yen currency pair had edged higher after data showed that Japan’s retail sales fell more than expected in January for a second consecutive month, impacted by lower fuel prices. The dismal retail sales data suggests that sluggish household spending in the world’s third largest economy is expected to keep economic growth in the fourth quarter subdued. With expectations that the Bank of Japan might hold off on additional monetary easing in its two-day rate review ending tomorrow, weak data releases in Japan are likely to keep the central bank under pressure to do more to bring the economy out of recession.

Later today, investor focus will be on the nation’s CPI data which is projected to show that consumer prices rose at a slower pace in December from a month ago. Also on tab will be Japan’s unemployment rate and industrial production data, scheduled later today.