By Mihai Faur

USD:

This week will be a relatively quiet week for the US dollar in terms of economic data. The only major economic data released from the US this week will be the Retail Sales (Thursday). The expectations for January are that retail sales will come out around -0.3% m/m (consensus -0.4%) and core sales around 0.4% (consensus 0.5%).  Despite a lack of major economic data from the US, the release on Friday of a better than expected NFP reading should give the US dollar a huge boost as it showed that the labor market in the United States is strengthening and that a rate hike can be seen during this year.

EUR:

In the Euro area, this week all the eyes will be focused towards the Eurogroup meeting (Wednesday), where the main focus of the meeting will be the design and implementation of a program of further financial aid for Greece. As the Greek proposal to extend the negotiations until the end of May are highly unlikely to be accepted, we expect a heightened risk of a Greek exit.

GBP:

In the UK, the most important release this week will be the quarterly inflation report. In November, the inflation reported warned that inflation might fall below 1%. Moreover, the two policymakers that voted for a rate increase have joined the side that voted against therefore they see an increased probability for prolonged low inflation. If the quarterly report will decrease the inflation expectations once again then we can expect that the rate hike to be delayed which will weaken the pound.