[vc_row][vc_column][vc_column_text]The Christmas break left the currency market sluggish, but things quickly got back up to speed as the New Year began.

Pound Sterling is on mixed form today, with GBP/EUR having risen 0.3% to €1.1307 while GBP/USD has fallen -0.2% to US$1.3536.

The week ahead could see stop-start movement for the major currencies, as several of the domestic data calendars alternate between being packed with releases one day and being completely empty the next.

GBP unsteady as December PMIs leave doubts over impact of Brexit on UK economy
The final set of UK PMIs for 2017 left the pound on volatile form by raising questions about the health of the UK economy heading into the New Year.

Although markets were first disconcerted by an above-forecast drop in the UK’s latest manufacturing PMI on Tuesday, Sterling quickly recovered after analysts pointed out that the index remained firmly in growth territory at 56.3 points. This means the average PMI reading for the final quarter of 2017 clocked in at a respectable 57 points.

Pound exchange rates started Wednesday on the advance as well, even though the construction PMI also fell further-than-expected; though demand for house building remained robust, civil engineering and commercial building projects continued to dry up, as Brexit cast a shadow on the UK’s economic outlook.

Sterling began to weaken towards the end of the day, and this continued on Thursday, even though the UK services PMI rose above forecast from 53.8 to 54.2. Markets weren’t convinced that the data was as positive as the headline uptick suggested.

Despite a lack of impactful UK data on Friday, pound Sterling was able to end the week largely on the rise, thanks to weakness in the day’s Eurozone and US economic data. Despite this, Sterling still fell short of reclaiming the week’s highs.

After a quiet start to the week, the UK data calendar picks up on Wednesday, with a slew of eco-stats including industrial production, manufacturing production and construction output data, as well as the latest trade balance figures, all for November.

There will also be the latest estimate of GDP from the National Institute of Economic and Social Research (NIESR), this time covering the three month period to December.

There is only one release scheduled for publication on Thursday, but as this is the Bank of England’s (BoE) Credit Conditions and Bank Liabilities Survey results, it could be enough to cause plenty of GBP volatility on its own.

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* Information courtesy of Currencies Direct
The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. Currencies Direct cannot be held responsible for any loss or damages arising from any action taken following consideration of this information. This article was written by Currencies Direct.[/vc_column_text][/vc_column][/vc_row]