ChamberFX Weekly Brief
Keep up-to-date on foreign exchange developments and news with our ChamberFX weekly briefs and monthly newsletters. These valuable insights are provided by Damon Ellam, International Payments UK, MoneyCorp. Damon is our regional representative and will be providing useful monthly FX forecasts to help chamber members with their currency strategies.
APRIL 2025
Welcome to my April newsletter. I hope you find it useful and informative.
Liberation Day leads to a crazy day for markets!
GBPUSD trades through 1.30, EURUSD through 1.11 and GBPEUR falls below 1.18.
Major stock indices, including the S&P 500 and Nasdaq, experience sharp declines due to concerns over disrupted supply chains and potential inflation. This marks the biggest losses for major US stocks since 2020.
Invoking a national emergency posed by the "large and persistent trade deficit", President Trump imposed a 10% tariff on imports from all countries and a reciprocal higher tariff on countries with which the US has large trade deficits.
The USD came under pressure as markets grappled with the conundrum this will pose the FOMC. Tariffs could cause inflation to rise in the US which would normally call for tighter monetary policy, but a potentially higher unemployment rate and weaker growth would likely lead to the Fed wanting to lower rates.
With China this morning announcing their retaliatory tariffs on US imports, ongoing negotiations and international responses will be crucial in shaping the future of global trade relations.
Although the USD was the main loser yesterday, the GBP also came under pressure against the Euro as we saw EURUSD positions being unwound as investors moved funds from the US to Europe following the announcements. The market still remains cautious on the Euro though given the Eurozone’s longer term economic challenges, including the impact of Germany’s spending expansion.
April Outlook:
- US Non-Farm Payroll Report: Today, the US will release the Non-Farm Payroll report for March. This report is crucial as it can influence the strength of the US Dollar depending on the employment figures.
- Central Bank Meetings: April will see meetings from major central banks, including the European Central Bank (ECB). The ECB cut interest rates for the fifth consecutive time, bringing the deposit rate down to 2.5%. ECB President Lagarde mentioned that the ECB is nearing its inflation target, but markets are pricing in further rate cuts.
If you’d like to discuss strategies for your business or need insights on navigating the upcoming risk events, please get in touch.
Best regards,
Damon"
Weekly FX Briefs
Contact
For further information and advice on Hull & Humber's ChamberFX, or for assistance with your currency strategy, please click here or contact Lorraine Holt at l.holt@hull-humber-chamber.co.uk or call 01482 324976.
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