Foreign exchange market. European session: the British pound declined against the U.S. dollar despite the better-than-expected retail sales data from the U.K.

Economic calendar (GMT0):

(Time/ Region/ Event/ Period/ Previous/ Forecast/ Actual)

01:35 Japan Manufacturing PMI (Preliminary) January 52.0 52.1

01:45 China HSBC Manufacturing PMI (Preliminary) January 49.6 49.5 49.8

07:58 France Services PMI (Preliminary) January 50.6 50.9 49.5

07:58 France Manufacturing PMI (Preliminary) January 47.5 48.1 49.5

08:28 Germany Manufacturing PMI (Preliminary) January 51.2 51.8 51.0

08:28 Germany Services PMI (Preliminary) January 52.1 52.6 52.7

08:58 Eurozone Manufacturing PMI (Preliminary) January 50.6 51.0 51.0

08:58 Eurozone Services PMI (Preliminary) January 51.6 52.1 52.3

09:00 Switzerland World Economic Forum Annual Meetings

09:30 United Kingdom Retail Sales (MoM) December +1.6% -0.6% +0.4%

09:30 United Kingdom Retail Sales (YoY) December +6.4% +3.0% +4.3%

The U.S. dollar traded higher against the most major currencies ahead of the U.S. economic data. The U.S. preliminary manufacturing purchasing managers' index is expected to climbs to 54.1 in January from 53.9 in December.

The existing home sales in the U.S. are expected to increase to 5.08 million units in December from 4.93 million units in November.

The euro fell against the U.S. dollar as the European Central Bank's decision to expand its asset purchase programme to 60 billion euro a month starting from March 2015 until September 2016 still weighed on the euro.

Eurozone's preliminary manufacturing PMI increased to 51.0 in January from 50.6 in November, in line with expectations.

Eurozone's preliminary services PMI rose to 52.3 in January from 51.6 in December. Analysts had expected the index to climb to 52.1.

Germany's preliminary manufacturing PMI decreased to 51.0 in January from 51.2 in December, missing forecasts of an increase to 51.8.

Germany's preliminary services PMI increased to 52.7 in January from 52.1 in December, beating expectations for a gain to 52.6.

France's preliminary manufacturing PMI rose to 49.5 in January from 47.5 in December, exceeding forecasts of a rise to 48.1.

France's preliminary services PMI fell to 49.5 in January from 50.6 in December, missing expectations for a gain to 50.9.

The British pound declined against the U.S. dollar despite the better-than-expected retail sales data from the U.K. Retail sales in the U.K. increased 0.4% in December, exceeding expectations for a 0.6% drop, after a 1.6% gain in November.

The increase was driven by lower petrol prices and higher demand in food.

On a yearly basis, retail sales in the U.K. climbed 4.3% in December, beating expectations for a 3.0% rise, after a 6.4% increase in November.

The Canadian dollar traded lower against the U.S. dollar ahead of the Canadian economic data. The consumer price index in Canada is expected to decline to an annual rate of 1.5% in December from 2.0% in November.

The core consumer price index in Canada is expected to remain unchanged at an annual rate of 2.1% in December.

Canadian retail sales are expected to increase 0.1% in November, after a flat reading in October.

Canadian retail sales excluding automobiles are expected to rise 0.5% in November, after a 0.2% rise in October.

The loonie dropped against the greenback on Wednesday as the Bank of Canada (BoC) cut its interest rate. The BoC lowered its interest rate to 0.75% from 1.0%.

EUR/USD: the currency pair fell to $1.1114

GBP/USD: the currency pair decreased to $1.4952

USD/JPY: the currency pair fell to $117.75

The most important news that are expected (GMT0):

13:30 Canada Retail Sales, m/m November 0.0% +0.1%

13:30 Canada Retail Sales ex Autos, m/m November +0.2% +0.5%

13:30 Canada Consumer Price Index m / m December -0.4% -0.5%

13:30 Canada Consumer price index, y/y December +2.0% +1.5%

13:30 Canada Bank of Canada Consumer Price Index Core, m/m December -0.2% -0.3%

13:30 Canada Bank of Canada Consumer Price Index Core, y/y December +2.1% +2.1%

14:45 U.S. Manufacturing PMI (Preliminary) January 53.9 54.1

15:00 U.S. Existing Home Sales December 4.93 5.08