FX markets were relatively steady, after Trump avoided escalating currency or trade rhetoric during a closely watched speech in Switzerland. While he doubled down on interest in Greenland, the absence of fresh threats was enough to calm nerves, giving a boost for risk appetite. Overall, markets took the speech as a relief rather than a resolution, with geopolitical uncertainty still lingering in the background.
GBP was little changed after CPI surprised slightly to the upside at 3.4% YoY, though the data did little to shift expectations for a gradual BoE easing path.
*Daily move - against G10 rates as of 06:00 GMT, 22.01.26
** Indicative rates - interbank rates as of 06:00 GMT, 22.01.26
Risk appetite is back in the markets this morning after Trump backed off of threats on imposing tariffs on European nations opposing his efforts to take control of Greenland. Trump also cited that he is working on a framework for a future deal with NATO.
Today's focus is on US Q3 GDP and core PCE. GDP is expected to confirm a solid but cooling economy, with only minor revisions likely. The bigger market mover is core PCE, the Fed’s preferred inflation gauge. A soft print would reinforce expectations for rate cuts later this year and weigh on USD, while any upside surprise could push back against the recent dovish shift in rates.
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.
