By Ashley Finill
It’s been a relatively quiet start to the trading week with not much in the way of data coming out to shake up the markets. After last week’s Bank of England interest rate cut, Sterling had been on shaky ground against the majors, but this week the Pound has somewhat stabilised throughout this week showing small signs of recovery. There are still some data releases to take note of this week which could cause some volatility in the currency market going forward. GDP figures from the UK will be announced early doors on Thursday at 7am, which will give an outlook on how the UK economy is faring. The economy in the UK has suffered some setbacks since the turn of 2024 which have been reflected in Sterling’s performance over the past couple of months, losing almost 2 cents on the Euro since festive period, and just over a cent on the US Dollar. The upcoming GDP announcement could be a turning point for Sterling or hindrance as the markets will almost certainly react to the figures posted, so if you have a requirement for currency this week it may be a good idea to contact your currency consultant ahead of Thursday morning to discuss your options.
Trump and His Tariffs
Since his Inauguration just over 3 weeks ago, US President Donald Trump has ruffled feathers across the globe as he has implemented tariffs on imports on several countries, which include China, Canada and Mexico seemingly kicking off a trade war. Shortly after the tariffs were announced by Trump, Mexico, and Canada both made calls to Trump. Subsequently the implementation of the new tariffs has been paused for one month, giving more time for negotiation. Last week, Trump also applied a 25% tariff on steel and aluminium imports from the EU, this was met with anger from EU leaders from the region and vowed to retaliate against the “unjustified” tariffs. Trump also threatened the UK with tariffs a few weeks ago but has since gone quiet on any measures being applied by the US on the UK. Although that does not mean the UK will dodge Trump’s tariffs. When questioned about the UK, the president said Britain was “out of line” when it came to trade, but he thought the situation could be “worked out” without the use of tariffs. Since Trump has been throwing his weight around, the markets have somewhat quietened down as maybe investors aren’t having a knee jerk reaction to his threats. However, tariffs being imposed is not the only topic in recent news that could influence the currency market going forward, the cease fire in Gaza is coming under some pressure and Trump has been quoted to say that the US will move into Gaza whilst the release of hostages stop. As The US dollar is a safe haven currency, investors may opt to push their money in the USD should further unrest continue in the middle east.
Data Remaining this week
The second half of the week may be more eventful than what has come already in the way of data. This afternoon at 1.30pm the US post Consumer Price Index. There also various Speeches throughout the day from members of the Fed, ECB and BoE. Onto Thursday morning, as mentioned already GDP in the UK is to be announced at 7am so we can expect some volatility early doors. At 9am, the EU post industrial production figures. Into the afternoon the US post initial jobless claims and Producer Price Index at 1.30pm. Onto Friday, in the morning the EU post employment change and Gross Domestic Product. To finish off the week the US post retails sales at 1.30pm.