According to data released by the UK Office for National Statistics last Friday, retail sales in December of last year decreased by 0.3% month on month, which was lower than the market's expected growth of 0.4%. The retail sales data for the previous month has also been adjusted, from a growth of 0.2% to a growth of 0.1%. These data further demonstrate the disappointing performance of retailers during the Christmas holiday period. Despite the continuous increase in real income, British households remain cautious amid expectations of rising inflation and slowing interest rate cuts. Hannah Finselbach, Senior Statistician at the UK Office for National Statistics, said: 'This is due to very poor food sales, which have fallen to their lowest level since 2013, with supermarkets being particularly affected.' Weaker than expected retail sales data supports the Bank of England to adopt more aggressive easing policies to boost economic growth, and traders currently expect the Bank of England to cut interest rates three times this year.

In addition, the second valuation data released by the European Union Statistics Office on January 17 local time showed that the inflation rate in the eurozone in December 2024 was 2.4% on an annual basis, which was the same as the preliminary statistical data previously released, but still higher than the 2.2% in November 2024. The data also shows that the EU's inflation rate for December 2024, calculated at an annual rate of 2.7%, is higher than November's 2.5%. From a national perspective, compared to November 2024, the inflation rates of 19 EU member states have increased.

The data that needs to be monitored today include Germany's December PPI annual rate and the Eurozone's November construction industry output monthly rate.

US dollar index

Last Friday, the US dollar index fluctuated upwards, with a slight daily increase and the current exchange rate trading around 109.30. In addition to short covering and technical buying near the 109.00 level, which provided some support for the exchange rate, a series of good economic data released by the United States during the period were also important factors supporting the rebound of the exchange rate. However, the expectation of a rate cut by the Federal Reserve in March has limited the room for the exchange rate to rebound. Today, pay attention to the pressure situation around 109.80, with support below around 108.80.

EUR/USD

Last Friday, the euro fluctuated downwards, with a slight decline in the daily chart. The current exchange rate is trading around 1.0290. In addition to the technical selling near the 1.0300 level, which has exerted some pressure on the exchange rate, the rebound and rise of the US dollar index supported by good economic data is also an important factor in pressuring the euro to weaken. In addition, the weak performance of CPI data released by the Eurozone during the period also exerted some pressure on the exchange rate. Today, pay attention to the pressure situation around 1.0400, with support below around 1.0200.

GBP/USD

Last Friday, the pound fluctuated downwards and fell below the 1.2200 mark, with the current exchange rate trading around 1.2180. In addition to the rebound and rise of the US dollar index supported by short covering and good economic data, which exerted some pressure on the pound, the significantly lower than expected retail sales data released by the UK during the period was also an important factor in pressuring the pound to weaken. Data shows that retail sales in the UK decreased by 0.3% month on month in December, with market expectations for an increase of 0.4%. Today, pay attention to the pressure situation around 1.2250, with support below around 1.2100.