EUR, GBP Outlook: RBC Capital Markets

Qutoes from RBC Capital Markets

• EUR: 
  
  We think Euro area IP could surprise to the upside for January (RBC: 0.4%m/m, cons 0.2%), but as long as the ECB is committed to easing until inflationary pressures pick up, it will take much longer for stronger economic data to feed through to a stronger currency. 
  
  With that in mind, we still think EUR/USD will trade lower from here.
  
  
• GBP:  
  
  We look for Jan IP to be up 0.1% m/m (cons 0.2%). Within that, the manufacturing sector is expected to do a little better-we see growth of 0.2% m/m, in line with consensus.
  
  The 0.8% q/q forecast for Q1 GDP will require the data to indicate that things are off to a good start. Nevertheless, that matters a lot more in the services sector, so the relatively modest result we foresee from industrial production wouldn't represent a major challenge to the view that overall growth can accelerate in Q1 from the 0.5% q/q in Q4 2014.