Yesterday, Donald Trump captured the market's attention with two main points.
Firstly, he announced his plan to engage in discussions with Federal Reserve (Fed) Chair Jerome Powell, advocating for interest rate reductions to alleviate the financial burden on American households.
And secondly, he told Fox News that his preference is to not have to impose tariffs on China, stating that he already has had “good, friendly” talks with Xi Ping. The softening of USD is continuing as a result.
*Daily move - against G10 rates at 7:30am, 24.01.25
** Indicative rates - interbank rates at 7:30am, 24.01.25
The EUR is finishing the week on a high note with the release of EU and German PMIs coming in stronger than expected.
Whilst markets are widely expecting a 25bp rate cut in next week's European Central Bank (ECB) meeting there are whispers that, due to inflation concerns resurfacing, markets may well start to trim rate cut expectations. In addition, an improved economic outlook will further strengthen expectations for a trim in rate cut forecasts.
UK and US PMIs are out today but the overriding theme seems likely be a continued softening of USD in light of Trump's comments last night.
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