USD fell sharply yesterday afternoon after the Wall Street Journal reported that President Trump will fall short of imposing new tariffs on his first day in the office. Instead, he is set to issue a plan that will direct federal agencies to look at current trade policies and US trade relationships. Both GBPUSD and EURUSD climbed by 1% as a result.
*Daily move - against G10 rates at 7:30am, 21.01.25
** Indicative rates - interbank rates at 7:30am, 21.01.25
The sell-off on USD yesterday has been reversed in part this morning after Trump announced he expects to raise 25% tariffs on Canada and Mexico by 1st February. Unsurprisingly both CAD and MXN are under pressure this morning. Anticipate dynamic shifts in the USD this week, as Trump’s tariff announcements unfold, but overall markets remain positioned for a strong USD over the medium term.
UK job numbers this morning were uneventful. Unemployment rate rose as expected to 4.4%, and weekly earnings excluding bonus rose by 5.6%, surpassing the 5.5% forecast. As a result, GBP moves are muted. On the data front, the latest ZEW survey from Germany and Europe are due out today. These will help us gauge whether there has been an uptick in economic sentiment. Then in the afternoon Canadian CPI numbers.
As mentioned above, any Trump headlines could be the key driver of market movements.
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Over the last 19 years we’ve helped over a million customers and last year alone processed over £12bn. We’re tried and trusted, and we’re ready to help you.
Have a great day.
