Federal Reserve minutes from their January meeting pressed home the fact that officials feel the need to see inflation continue to fall before committing to lowering interest rates further. On top of this, members also expressed concerns as we mentioned yesterday around the economic impacts off the back of Donald Trump’s tariffs. Last month, The Federal Reserve had decided against reducing rates further, bringing a pause after seeing three consecutive cuts prior.
Earlier this morning, Gold experienced record highs due to safe-haven demand after more comments from Donald Trump in relation to further tariffs. Yesterday Trump stated he would also implement 25% tariffs on all imports of Automobiles, Pharmaceuticals and Semi-Conductor Chips. These tariffs are expected to come at any point within the next 4 weeks. On top of this, Donald Trump also committed to 25% tariffs on all Lumber imports into The U.S.
These comments from Trump have now ramped up concerns further that increasing U.S tariffs will only lead to a disruption within global trade and potentially spark a renewed trade war with the world’s biggest economies.
Australian unemployment has also been released this morning, with figures showing the rate had ticked up throughout January. This comes even though job creations comfortably outpaced projected figures. All of the gains crucially came in Full-Time employment which is even more encouraging economically. The Australia Bureau of Statistics noted this was a pattern that has emerged from the pandemic where an unusually large number of people were jobless in January but expected to re-enter some form of employment in the near future. This current state within the labour market only goes to reinforce the opinion of the Reserve Bank of Australia to implement a slow easing cycle with interest rates.
GBP/EUR 1.2074 GBP/USD 1.2600 GBP/AED 4.6314
GBP/AUD 1.9775 GBP/CHF 1.1370 GBP/CAD 1.7914
GBP/NZD 2.2010 EUR/USD 1.0425 GBP/ZAR 23.3265