Magna Financial Market Report –January 13th 2025
|
|
|
|
|
|
|
|
|
• GBP slides on fiscal concerns
• USD rises on strong job data
|
|
|
|
|
RECAP
In December, the US economy showed strong growth, with227,000 new jobs added and the unemployment rate dropping to 4.1%. The USD gained momentum on Friday, pushing the index to its highest levels since November 2022. This shift in the market outlook now suggests that only one 25bps rate cut is expected throughout 2025.
Meanwhile, the GBP continued its downward trend as the week concluded.
|
|
|
|
|
|
OUR SUMMARY
The GBP is under continued pressure this morning, with fiscal concerns lingering in the market. UK yields have risen again following Rachel Reeves’ comments over the weekend, where she reiterated that the fiscal rules from the October budget are non-negotiable, and growth remains the government’s top priority.
This stance appears to be at odds with market expectations, leaving the pound vulnerable to further declines in the short term.
The UK faces a significant week ahead, with CPI data on Wednesday, November’s GDP numbers on Thursday, and retail sales figures on Friday. Any negative developments in these releases could exacerbate the downward momentum for GBP.
In the US, the upcoming CPI report will be a key focus. Markets have already tempered expectations for rate cuts this year, but if inflation surprises to the upside, it could prompt a reassessment, potentially eliminating any expectations for rate cuts in 2025.
|
|
|
|
HOW WE CAN HELP
Our team of currency experts are here to help you get more from your money when making international payments. We will work with you to understand your payment needs and offer specialised guidance on the best options available to you. Get in touch with Osman Hanif today on +44 (0) 20 3371 9200 or email osman@magnafinancial.com
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
