US dollar surges amid fresh Trump tariff fears
Philip McHugh January 9th 2025 - 2 minute read
Pound (GBP) stumbles amid UK debt jitters
The pound (GBP) came under pressure yesterday as concerns mounted over the implications of rising UK bond yields on the nation’s fiscal health.
GBP investors fear the recent uptick in borrowing costs could inflate the UK’s debt burden, forcing Chancellor Rachel Reeves to impose new tax hikes to avoid potentially breaching the government’s own fiscal rules.
Expect Sterling to remain on the defensive if these concerns persist through today’s session.
Euro (EUR) dented by worrying German industrial data
The euro (EUR) was undermined on Wednesday as data from Germany’s vital industrial sector, revealed that factory orders plummeted in November.
The single currency faced additional pressure as a result of its negative correlation with the US dollar (USD), although it was still able to risk against some of its more risk-sensitive peers.
Coming up, the euro may be able to mount a recovery today, after Germany’s latest trade figures reported a much larger-than-expected expansion of the nation’s trade surplus in November.
US dollar (USD) soars on Trump tariff fears
The US dollar surged yesterday, on the news that Donald Trump is considering declaring a national economic emergency upon returning to office.
This will allow Trump to invoke the International Emergency Economic Powers Act (IEEPA), granting his broad authority to impose his plans for widespread tariffs on US imports.
Looking ahead, the US dollar may maintain a positive trajectory today, as investors turn cautious ahead of the latest US non-farm payroll report.
Canadian dollar (CAD) buoyed by USD strength
The Canadian dollar’s (CAD) positive correlation with the US dollar gave it a lift on Wednesday, despite Trump’s tariff plans potentially hitting Canada hard.
In the absence of any notable domestic data, we may see the commodity-linked ‘loonie’ influenced by oil price movements.
Australian dollar (AUD) weakens despite positive trade data
The Australian dollar (AUD) trended broadly lower overnight on Wednesday, as a jittery market mood overshadowed Australia’s stronger-than-expected trade figures.
New Zealand dollar (NZD) subdued in cautious trade
The New Zealand dollar (NZD) also struggled in overnight trade as the currency was undermined by risk-off flows.
Never miss a movement. Create a free account with Currencies Direct to get the latest currency news delivered straight to your inbox. You can also set up rate alerts and check live rates 24/7.
Written by
Philip McHugh