Excel Currencies Blog

Donald Trump is almost single handedly the main reason for the above headline. Tariffs on foreign imports to the US are a pro-USD outcome and subsequently, these will also have potentially huge implications on major exporters to the US such as China & the Euro-Zone (which would affect GBP v EUR).

As we keep mentioning; Trump brings uncertainty and that creates market volatility. For example, the President said overnight that he would impose as much as 25% tariffs on Mexico & Canada due to border issues and both currencies ended up falling by 1% against the Dollar.

Trump makes an already volatile market (the FX market is the biggest and one of the most volatile in the world) even more unpredictable. Therefore, we suggest that large transactions have to be protected by either hedging or through Forward Contracts (or both of course). Please contact us for more information on these specialized products. 

In other news, job vacancies in the UK have today marked 30 consecutive months of decline and the unemployment rate has risen to 4.4%. However, average earnings had risen to 5.6% from 5.2% (2% target). As the BoE consider wages a key driver of inflation, this has hurt the chances once again of seeing more than 3 UK interest rate cuts this year. 

Sterling has dropped slightly versus the USD since yesterday's rally and remains unchanged against the Euro.