The single European currency as well as the pound behaved in completely different ways again. More precisely, they behaved in approximately the same way in the first half of the day - they grew slightly. However, it was already in the afternoon when the single European currency began to decline in price, while the pound stood still. Moreover, the pound generally began to grow a little later. So, you don't have to get bored.

The day began with the publication of inflation data in Germany, which is the latest in anticipation of the publication of data for the entire euro area. Now, inflation rose from 1.1% to 1.5% in Europe's largest economy. Not only is it the largest economy in Europe, but other major countries are also recording an increase in inflation, so it is not surprising that the single European currency has gradually strengthened its position.

Inflation (Germany):

But then the euro confidently went down, and American statistics are to blame for this, which turned out to be significantly better than the most daring forecasts. Thus, the total number of applications for unemployment benefits decreased by 46 thousand, instead of decreasing by 6 thousand. In particular, the number of repeated applications for unemployment benefits decreased by 36 thousand, although a decrease of 11 thousand was expected. Moreover, the number of initial applications for unemployment benefits, decreased by 10 thousand instead of increasing by 5 thousand. However, the most striking data was on retail sales. The growth rate of which accelerated from 3.3% to 5.8%, although they expected a slowdown to 2 ,9%. And if you recall the recent rise in inflation in the United States, then this is just a fantastic combination in combination with a significant increase in consumer activity.

Retail Sales (United States):

Such caution is caused by two factors at once. In particular, the Democrats still decided to continue their war with Donald Trump, transferring materials on impeachment to the Senate. Although it is obvious that the Republicans, who have a majority in the Senate, will wrap up this matter, because otherwise they will not have time to pick up a new candidate for president. Yes, even the accusations themselves look simply ridiculous, since the main thing is that Donald Trump allegedly tried to use his position to get incriminating evidence against Joseph Biden, who, only by coincidence, is the main candidate for the presidency from the Democrats. Of course, it sounds just awful, and this is an outrageous example of abuse of power. However, the Democrats do not discuss such an interesting point as the fact that if they were looking for incriminating evidence, that means there is something to look for. It turns out that Donald Trump is charged with an attempt to find out if his competitor was involved in a corruption scandal. At the same time, Joseph Biden himself and his possible participation in the corruption scheme are not considered at all. To simply put it, imagine that the bully who broke the window of your car sues you for your request to your neighbor to submit photos of how this bully carries out his evil deed. At the same time, no one is planning to judge the bully himself. It is more like Alice in Wonderland. In any case, despite the absurdity of what is happening, the very fact that the Democrats still decided to transfer the matter to the Senate adds nervousness, which restrained the dollar.

Another intriguing moment was the intention of the European Union to sue the arbitration court of the World Trade Organization over the fact that the agreement between the United States and China, horrifyingly, violates not only the rules of the organization, but also the principles of free trade. At the same time, Europe threatened that the Old World would be forced to take retaliatory measures in the form of a substantial increase in trade duties and the introduction of barrage measures in the form of quotas for imported goods from the United States and China, if Washington and Beijing did not refuse this deal. In short, trade wars will not go anywhere and will only grow.

Apparently, the two above factors will continue to put pressure on the dollar together with statistics, which will also lead to a weakening dollar. Thus, everything can begin already with the publication of data on retail sales in the UK. The growth rate of which can accelerate from 1.0% to 3.2%. This will alleviate the negativity due to the recent slowdown in inflation, as well as dispel fears that emerged after major retailers reported failed Christmas sales. The sales failure occurred for the simple reason that people shop less and increasingly order home delivery of goods in various online stores.

Retail Sales (UK):

After that, inflation data in Europe will be published, which may accelerate from 1.0% to 1.3%. However, there is a possibility that the data will be better than forecasts, as indicated by inflation data in the largest countries of the euro area. At the same time, Christine Lagarde recently sent letters to the members of the European Central Bank's board forbidding any comments before the upcoming meeting of the regulator's board. In addition, it also appears that the leadership of the European Central Bank sees signs of a change in macroeconomic dynamics, which may serve as a reason for revising the current monetary policy. However, no one dares to talk about it ahead of time, apparently wanting to first receive confirmation of their assumptions. Moreover, even hints of such shifts will lead to panic in the markets that no one needs. But the most important thing here is that if we are talking about changing the parameters of monetary policy, then only in terms of tightening it and rising inflation will be just one more confirmation of these assumptions.

Inflation (Europe):

In turn, American statistics will not help the dollar, and even worsen its situation. So, the volume of construction should be reduced by 2.6%. But much worse is the fact that the number of construction permits issued may be reduced by 1.6%. That is, it is not only about reducing construction right now, but also that it will continue to decline. Moreover, the decline in industrial production may deepen from -0.8% to -1.2%. To simply put it, American statistics will be a dull sight today.

Industrial Production (United States):

Due to these factors, it is worth waiting for the next attempt of the single European currency to reach the level of 1.1175.

The pound can increase to 1.3150, first of all, against the background of a serious growth in retail sales, and then pushed by American statistics.