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EUR/USD fell to an eleven year low this week, not only because of the ECB’s pledge to begin a huge quantitative easing programme but also following the weekend’s Greek elections. Anti-austerity party Syriza were voted in, putting further downward pressure on the single currency.

With this victory there are growing fears that that Greek bail-out programme will fail to exist at some point in the near future, but not before showdown talks between the new governing party and its lenders.

Meanwhile, PM Alexis Tsipras named his new cabinet in Greece. The appointment of Yanis Varoufakis as finance minister sets the new Greek administration on a collision course with the German government, since Varoufakis is seen as a hardliner who will be looking for significant concessions from Greece’s creditors to allow the economy to try and grow its way out of the current slump. That said, Tsipras did quell market fears later in the week by saying “we won’t get into a mutually destructive clash, but we will not continue a policy of subjection”.

By Alex Edwards at UKForex, an international money transfer service

It wasn’t a particularly positive week for the pound, either. The first estimate of UK Q4 GDP was released on Tuesday, with both the quarterly and annual figures both undershooting market expectations. The quarterly reading printed 0.5%, a little lower than the 0.6% consensus, with 2014’s annual reading printing 2.7% when 2.8% was expected.

Expansion for the Oct-Dec quarter was dominated by service sector growth. However, output decreased in both construction and manufacturing. The pound fell on the back of the release with GBP/USD dropping below 1.51. Given this slightly under-par reading, it does seem likely that interest rates will remain on hold for the rest of the year.

Over in the States, the Fed announced its decision on monetary policy, with it fairly clear that they’re taking a ‘wait and see’ approach. The bulls are likely to be buoyed by various changes in language in the statement as the Fed removed the phrase “considerable time” entirely and made reference to “strong jobs gains” rather than “solid job gains”.

On the flip side, the doves will be pointing to the Fed’s concerns for the rate of inflation which read “inflation has declined further below the Committee’s longer-run objective, largely reflecting declines in energy prices”. It went on to say “inflation is anticipated to decline further in the near term”.

Once the dust settled, there was perhaps a realisation that the Fed’s monetary policy and outlook seems to be ever diverging away from that of other major central banks – whether this continues is debatable but we’re going on the Fed’s latest statement here.

The commodity currencies, including AUD and NZD, spiralled lower last week as speculation for an RBA rate cut at next Tuesday’s meeting intensified. A prominent Australian journalist with supposed close links to people at the RBA has said he’s “almost certain” that the central bank will cut and markets are now close to pricing in a 70% chance of such an occurrence.

It wasn’t a surprise therefore to see AUD/USD drop to a low of .7716. Across the Tasman, the RBNZ announced last week that it would be leaving interest rates unchanged. Moreover, the sell-off in the kiwi materialised as the central bank indicated that it would be keeping rates on hold for some time in the face of a falling outlook on inflation and growth concerns.

The central bank also took the opportunity to talk the kiwi lower, saying “we believe the exchange rate remains unjustified in terms of current economic conditions, particularly export prices, and unsustainable in terms of New Zealand’s long-term economic fundamentals.”

Next week’s headlines will likely continue to be dominated by Grexit and QE concerns. February will also be a key month as the new Greek administration meets with EU officials to try and come to some agreement with the IMF, ECB and European Commission over relaxing the current terms of its €240BN bailout.

In terms of data we look to UK PMI and the BoE rate announcement, although it’s a forgone conclusion that interest rates will remain on hold. The RBA announcement on Tuesday isn’t such a foregone conclusion so expect some volatility in the Aussie early on. The big data from the US will be non-farm payrolls. Although employment numbers from the States have picked up during the last year, the global inflation issue might mean the expectation for a Fed rate hike this calendar year is brought into question sooner rather than later.   If this data disappoints on Friday it could see the latest dollar gains erased, but there’s a long week before that point.

In our latest podcast, we do a Fed rundown analyze the Greek elections and discuss the suffering Aussie

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