Unemployment in the UK advanced slightly to 4.4% in November from 4.3% the month prior. Average earnings, both with and without additional bonuses, increased by 5.6% in the three months to November, slightly more than had been expected. The pound was little changed against its rivals after the release but that could change as things develop today.
Yesterday marked the inauguration of the 47th president of the United States, Donald Trump. Despite picking up his pen to sign an unusually large barrage of executive orders, the president stopped short of immediately imposing trade tariffs on Canada, Mexico and Europe. This helped ease pressure on several global currencies and caused the US dollar to fall by more than 1% against the pound and the euro.
When we say those executive orders were abnormal, allow us to provide some context. In the post-WWII era, US presidents have signed an average of 59 executive orders per year. Trump meanwhile targeted hundreds of orders in one day, and while it may take some time to record the precise number, he is widely reported to have exceeded 100.
When combined with some of the rhetoric of the campaign trail, this highlights the very real risk that Trump’s second term will become one of top-down government by decree. If Trump were to circumvent the usual legislative mechanics, currency markets would in theory be exposed to rapidly changing US policy and a good deal more volatility. You can read more about these risks in our latest Quarterly Forecast.
Markets were quiet yesterday aside from the focus on the inauguration. The euro must today navigate the German ZEW economic sentiment index, which is forecast to have dipped slightly to open 2025.
The consumer mood has taken a fall to begin 2025, according to S&P’s UK sentiment index. The survey of 1500 British households came in at a twelve-month low in January as financial wellbeing fell and respondents highlighted increased worry about personal debt.
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