Thursday 09/01/2025

John Hall • January 9, 2025

Daily Update 09/01/2025

Key Headline:

· UK assets experience a sell-off as risk premiums increase.

· USD strengthens following the announcement of Trump’s new tariff program.

Recap

GBP faced a significant sell-off yesterday as government borrowing costs soared, prompting markets to reassess the UK’s long-term economic outlook. Yields on 30-year gilts reached levels not seen since the turbulent 2022 Autumn budget, while 10-year yields climbed to peaks reminiscent of the 2008 financial crisis. Meanwhile, the USD strengthened broadly following reports that President-elect Trump is considering declaring a national economic emergency to implement a new tariff program. The dollar’s rally was further supported by expectations of prolonged higher interest rates, driven by the continued strength of the US economy.

Today’s Rates

Today's Interbank Rates at 09:45 am against GBP movement.

GBP>EUR – 1.1921

GBP>USD – 1.2292

EUR>GBP – 0.8390

EUR>USD – 1.0308

GBP>CAD – 1.7676

GBP>AUD – 1.9843

GBP>SEK – 13.693

GBP>AED – 4.5125

GBP>HKD – 9.5610

GBP>ZAR – 23.200

GBP>CHF – 1.1202

GBP>PLN – 5.0996

Today’s Key Takeaways

· GBP sell-off persists as traders’ factor in a risk premium due to concerns over the Government potentially breaching fiscal rules.

· GBPUSD hits its lowest level since April 2023, while GBPEUR reaches lows last seen in November 2024.

· Current market reactions draw comparisons to the UK Plc turmoil following the 2022 Autumn Budget.

· Ongoing market anxiety could extend GBP's downward trend further.

09th January 2025

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