GBP: The Bank of England’s hawkish attitude, which stated that monetary policy is expected to remain tight for a prolonged length of time as key indications of UK inflation stay elevated, supported the British Pound. Furthermore, the flash UK PMIs that were issued on Friday showed that growth was gaining up steam towards the end of the year, which should help the economy avoid a recession for the entirety of the fourth quarter.

EUR: Due to the surprise decline in business activity in the eurozone in December, which suggested the bloc’s economy is virtually surely in recession, the euro was among the worst performing currencies on Friday. In addition, the Services PMI dropped to 48.1 in December, while the Manufacturing PMI for the Eurozone came in lower than anticipated at 44.2. In the future, investors will look to the German IFO survey for additional guidance.

USD: On Friday, the U.S. Dollar partially recovered its losses from the previous week as stronger-than-expected statistics supported the dollar’s rise. Additionally, two Federal Reserve representatives attempted on Friday to counter market predictions of early interest rate reductions. Investors will likely decide to stay away from the market going forward and will instead be watching Friday’s release of the US Core PCE Price Index, which is the Fed’s favoured inflation indicator.

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