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Currency moves dominated market sentiment last week, as the US Treasury Secretary talked down the US dollar whilst his boss, President Trump, flew in to the meeting of the great and the good at Davos and started talking it up. The net outcome over the week though was further strengthening of the pound against the dollar; great news if you are thinking of going to the US on holiday, less good if you earn a big chunk of your profits in dollars and have to translate them back to pounds and pence at a less favourable rate.
Key data for the week ahead comes in the form of inflation reports in Europe & America, with Wednesday seeing the interest rate decision of the last meeting of FOMC (Federal Open Market Committee) to be chaired by Janet Yellen. No change is expected to the 1.25% – 1.5% current policy range at this meeting, but the consensus now anticipates three quarter point rises this year.
Company results of particular significance/interest this week include Unilever and Shell from the UK, as well as the much smaller firm Oxford Biodynamics. There are lots of US companies reporting, including Facebook and PayPal on Wednesday and Amazon and Apple on Thursday.