GBP/USD last week touched a fresh post-Brexit high after a bout of USD weakness and a soft Brexit tone helped push the currency pair higher. Reports that the Spanish and Dutch are seeking a soft Brexit deal last week acted as the catalyst to the Pound rally. In the US, the Government shutdown has continued into the working week. House of Representatives passed a bill to keep the government funded until mid-February, however the Democrats have blocked this bill causing the shutdown. Despite the drama, the shutdown continues to be seen as little more than a blip for markets and the US economy for now.
A key psychological EUR/USD level broke last week due reports that the ECB are going to call an earlier than expected end to its Quantitative easing programme this Thursday. A small rebound was seen later on in the week as doubts around the success of the German coalition seeped into the market.
This week, we have a raft of high tier data released, including both UK and US first reading GDP and the UK headline jobless rate. The most anticipated day this week is Thursday with the Draghi-led Press conference and ECB rate decision. Markets will be looking for clues to see if the ECB will announce an earlier than expected end to their QE programme.