Retaining gains

BoE hikes rates 

The Pound's found some support in the past two weeks, climbing away from the 9th of December low points, but has struggled overnight. Last week, one of the main interest points for Sterling investors was the Bank of England's Monetary Policy Committee Meeting, where policymakers voted to hike interest rates. The central bank opted for a 15-basis point interest rate hike taking the benchmark to 0.25%; GBP/USD initially jumped 0.70% on the news. Some influential UK stats are out this week, including the final growth rate figure for Q3, both on the quarter and the year. December 23rd will be the last day for UK data releases, with the GfK Consumer Confidence number due for release.

Lagging behind the pack

The Euro hasn't been in the best position this year and has fallen versus the US Dollar considerably. Economic disorder, accommodative monetary policy, and no real inflation have been factors putting pressure on the common currency. As markets wind down for the holidays, the only notable data due out this week will be the Eurozone and German Consumer Confidence figures, which are both expected to show declines further into contraction territory.

Strength to strength

The US Dollar has been climbing towards the highs seen in November in recent trading sessions. Overall, the US Dollar has gained considerably throughout 2021 on the back of good growth prospects and a growing inflation narrative. While the Pound may have gained against the US Dollar, it's been slowly giving back its gains. In the week ahead, Durable Goods Orders data will be out, highlighting consumer sentiment and spending. Consumer Confidence data will print on Wednesday, followed by the monthly inflation reading on Thursday.

Losing momentum

Against a basket of other majors, the New Zealand Dollar has been trending at some of the year's lowest levels in December. Similarly, the Australian Dollar has been softer as we come to the close of the year—despite making some gains in recent sessions—as risk appetite ebbs on Omicron concerns. The Reserve Bank of Australia will release its meeting minutes this week, ahead of Westpac's Leading Index, detailing economic activity.

Retaining gains 

The Canadian Dollar has retained some of its gains this year on the back of inflation, solid employment, and energy self-sufficiency. Data out this week will include the October Canadian Retail Sales stat, Average Weekly Earnings, and Gross Domestic Product figures, as well as the November New Housing Price Index.