Key Headline:

Trump Announces Tariff Discussions: President Trump has confirmed plans to initiate talks regarding tariffs, signalling potential shifts in trade policy.

Recap

The USD experienced a sharp decline yesterday afternoon following a Wall Street Journal report indicating that President Trump will not impose new tariffs on his first day in office. Instead, he plans to outline a strategy directing federal agencies to review existing trade policies and the United States' trade relationships. This development led to a 1% rise in both GBPUSD and EURUSD.

Today’s Rates

Today's Interbank Rates at 09:20 am against GBP movement.

GBP>EUR – 1.1828

GBP>USD – 1.2250

EUR>GBP – 0.8454

EUR>USD – 1.0359

GBP>CAD – 1.7679

GBP>AUD – 1.9648

GBP>SEK – 13.583

GBP>AED – 4.5001

GBP>HKD – 9.5410

GBP>ZAR – 22.831

GBP>CHF – 1.1147

GBP>PLN – 5.0318

Today’s Key Takeaways

USD Recovery:

• Partially rebounding after yesterday's sell-off, USD strengthened as Trump announced plans to raise 25% tariffs on Canada and Mexico by February 
• CAD and MXN are under pressure, with expectations of further USD volatility this week.
• Markets remain optimistic about USD strength in the medium term.

UK Job Data:

• Unemployment rate rose to 4.4% as predicted, while weekly earnings (excluding bonuses) surpassed forecasts, increasing by 5.6% (vs. 5.5% expected).
• GBP remains largely unchanged following the data release.

Data Releases to Watch:

• ZEW Surveys: Insights into economic sentiment from Germany and Europe are expected today.
• Canadian CPI: Afternoon release will provide updates on inflation trends in Canada.

Market Drivers:

• Expect Trump’s tariff announcements and related headlines to play a pivotal role in shaping market movements.

21st January 2025

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