Currency market quiet as markets brace for more Trump policies
Philip McHugh January 24th 2025 - 2 minute read
Pound (GBP) uncertain as investors ignore CBI data
The pound (GBP) traded mostly sideways yesterday as a lack of notable UK economic data left Sterling without a clear directional bias.
GBP investors shrugged off some gloomy data from the Confederation of British Industry (CBI), instead preferring to wait for the more impactful data due out today.
That data is the UK’s latest PMIs. If British private sector activity ground to a halt this month, as expected, then Sterling could slide.
Euro (EUR) softens amid risk-positive mood
The euro (EUR) came under some pressure yesterday as a cautiously optimistic market mood dampened demand for the safer single currency.
In addition, ongoing European Central Bank (ECB) interest rate cut bets and weak Eurozone consumer confidence also dented EUR sentiment.
This morning, the Eurozone’s PMIs printed better than expected. This has given the common currency a boost at the start of today’s session.
US dollar (USD) stabilises as Trump volatility subsides
The US dollar (USD) was relatively calm yesterday as the volatility following Trump’s inauguration at the start of the week continued to subside.
USD investors were seemingly waiting to see if the new US President would unveil any new measures, particularly around tariffs or fiscal policy.
This afternoon, the latest US PMIs from S&P Global will be published. While these aren’t as impactful as the ISM PMI surveys, they could still support USD if they show a robust expansion in service sector activity.
Canadian dollar (CAD) struggles despite positive sales data
The crude-linked Canadian dollar (CAD) failed to gain ground yesterday, despite rising oil prices and stronger-than-expected retail sales figures, as concerns over tariffs hung over the currency.
CAD ends the week amid a lack of market-moving Canadian data. As a result, oil price movements may drive the ‘loonie’.
Australian dollar (AUD) jumps as Trump eases trade war fears
The Australian dollar (AUD) leapt higher overnight as Donald Trump said in a Fox News interview that he thinks the US and China can agree a trade deal. This further eased worries about trade tensions between Washington and Beijing, thereby boosting AUD.
New Zealand dollar (NZD) rallies amid risk-on mood
The New Zealand dollar (NZD) also surged last night following Trump’s comments as a risk-on mood swept markets.
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Written by
Philip McHugh