Euro sell-off continues on Trump concerns
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Daily Currency Update
The EUR/USD decline following the U.S. election has continued over the past 24 hours, with the pair now over three cents lower than it was a week ago. Holders of the shared currency are increasingly concerned about President-elect Donald Trump's rhetoric on implementing sweeping tariffs on all goods entering the U.S.German exporters, already struggling with a significant drop in demand from China, now face the prospect of punitive taxes in their largest export market, which could further reduce demand. Additionally, the Eurozone may have to support Ukraine on its own, as Trump is reportedly seeking a swift resolution to the conflict, even if it means Ukraine cedes territory to Russia. EUR/USD is currently around 1.0620, with further losses likely.
Key Movers
This morning brought the latest UK labour market data, showing a mix of results. The unemployment rate rose from 4% to 4.3%, but this pound-negative news was offset by an unexpected increase in wages, which climbed from 3.9% to 4.3% year-over-year. Later today, various members of the U.S. Federal Open Market Committee will be speaking across America, with their comments on the future path of interest rates, as always, a key focus.Meanwhile, news from the new Trump administration is expected to be the primary market mover for the foreseeable future, especially with President-elect Trump’s meeting with President Biden scheduled for tomorrow at the White House—this week’s main event. GBP/USD has slipped to 1.2815, with GBP/EUR around 1.2055 after briefly touching 1.21 yesterday around lunchtime.
Expected Ranges
- GBP/USD: 1.2760 - 1.2920 ▼
- GBP/EUR: 1.1995 - 1.2110 ▲
- GBP/AUD: 1.9520 - 1.9655 ▼
- EUR/USD: 1.0595 - 1.0700 ▼