Yesterday, the USD saw a continued sell-off, mirroring the dip in yields, as December's job openings came in at 7.6 million, falling short of the anticipated 8 million. Despite the dip, the figures continue to reflect a healthy job market, and overall, they haven't significantly altered rate expectations.
*Daily move - against G10 rates at 7:30am, 05.02.25
** Indicative rates - interbank rates at 7:30am, 05.02.25
China has responded to Trump's tariffs by announcing a probe into Google and new tariffs on US products this morning, seeing the USD marginally stronger this morning on some risk aversion. However, should we see the US and China move towards a de-escalation of trade tensions there could be a further correction on USD. But we must remember tariffs are not totally off the table and we expect FX volatility to remain relatively high over the coming months. Today, markets only have the US JOLTS numbers to focus on.
GBP enjoyed a good day on its “tariff-haven” status, but we still see the Bank of England's meeting on Thursday as a risk event for the currency and any dovish tones from the bank will add to rate cut bets thus potentially causing GBP to weaken.
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