Key Headline:

·       USD Volatility

·       Canada and Mexico tariff implementation postponed by one month

·       USD retreats, erasing earlier gains

Recap

·      The week started with the strengthening of the USD after the Trump administration imposed tariffs on Canada, Mexico, and China.

·      USD gains were later trimmed as an agreement was reached to delay tariffs on Canada and Mexico by one month.

·      GBPUSD finished slightly higher, benefiting from the UK’s service-driven economy, which is less exposed to tariffs.

·      GBP outperformed ahead of the Bank of England’s meeting on Thursday.

·      U.S. ISM manufacturing PMIs exceeded expectations, showing the first expansion in the sector since October 2022.

Today’s Rates

Today's Interbank Rates at 10:25 am against GBP movement.

GBP>EUR – 1.2022

GBP>USD – 1.2430

EUR>GBP – 0.8316

EUR>USD – 1.0339

GBP>CAD – 1.7926

GBP>AUD – 1.0018

GBP>SEK – 13.736

GBP>CHF – 1.1299

GBP>PLN – 5.0758

GBP>AED – 4.5662

GBP>HKD – 9.6820

GBP>ZAR – 23.290

Today’s Key Takeaways

·       China retaliated to Trump’s tariffs by launching a probe into Google and imposing new tariffs on U.S. products.

·       USD strengthened slightly on risk aversion but could correct lower if U.S.-China trade tensions ease.

·       Tariffs remain a risk, and FX volatility is expected to stay elevated in the coming months.

·       Market focus today is on U.S. JOLTS job openings data.

·       GBP benefited from its “tariff-haven” status but faces risks from Thursday’s Bank of England meeting.

·       A dovish BoE stance could increase rate-cut bets and weaken GBP.

4th February 2025

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