The US Dollar has stabilized as traders digest the latest tariff talks initiated by US President Trump. Amidst these developments, the market has maintained a positive tone, navigating what has been termed "Trump 2.0." The President's trade discussions have led to higher equities and a modest rebound in yields within established ranges. As the global economy continues to adapt to these changes, various currencies and markets are experiencing varied impacts.
In a notable shift, US imports contracted by 0.1%, primarily due to a decline in goods imports such as motor vehicles and crude oil. On the other hand, government consumption saw a rise of 0.5% quarter-on-quarter, driven by increased social security benefits in kind. Meanwhile, the GBP/USD currency pair faced renewed selling pressure, struggling around the 1.2300 mark during European trading hours on Thursday. Similarly, the Hungarian forint showed stabilization near its recent lows.
The Bank of Korea released its first estimate of Q4 growth figures, revealing a sluggish growth rate. Exports, however, rose by 0.3%, with IT-related services playing a significant role in this increase. Despite this, the GDP maintained its Q3 growth pace of 0.1% quarter-on-quarter, falling short of the anticipated acceleration to 0.2%. The EUR/USD currency pair traded sluggishly near 1.0400 during the European session on Thursday.
European Central Bank policymakers have entered their black-out period ahead of next week's policy decision. Meanwhile, the US dollar exhibited no clear trend following its earlier drop this week after Trump's trade announcements were perceived as better or less severe than feared. In Hungary, economic sentiment further declined in January, with GKI's indicator reaching its lowest level since late 2022, dropping from -17.3 to -18.
The South Korean economy also showed signs of slowing down, with year-on-year growth declining from 1.5% to 1.2%. However, the annual growth rate for 2024 is projected to increase to 2%, up from 1.4% in 2023.
The market's positive tone this week has primarily been influenced by the ongoing analysis of Trump's tariff talks. These discussions have contributed to higher equities and a modest rebound in yields within established ranges. The stabilization of the US dollar amidst these developments reflects traders' cautious optimism as they assess potential impacts on global trade.
In the United States, a contraction in imports was reported, mainly attributed to declining goods imports such as motor vehicles and crude oil. This decline reflects changing consumer behavior and economic adjustments in response to evolving trade policies. Conversely, government consumption increased by 0.5% quarter-on-quarter, driven by a rise in social security benefits in kind.
In foreign exchange markets, the GBP/USD currency pair faced renewed selling pressure during European trading hours on Thursday, hovering around the 1.2300 mark. The ongoing Brexit negotiations and uncertainty surrounding future trade agreements continue to weigh on the pound's performance.
In Hungary, the national currency stabilized near recent lows, mirroring broader economic sentiment challenges faced by the country. The GKI economic sentiment indicator recorded further deterioration in January, aligning with its lowest level since late 2022.
The Bank of Korea's release of Q4 growth figures highlighted a slow growth rate for the quarter. Exports showed a modest increase of 0.3%, driven by contributions from IT-related services. Despite these gains, GDP growth remained stagnant at 0.1% quarter-on-quarter, falling short of expectations for an acceleration to 0.2%. This data underscores ongoing challenges faced by South Korea's economy amidst global uncertainties.
In European markets, the EUR/USD currency pair experienced listless trading near 1.0400 during Thursday's European session. The European Central Bank policymakers have commenced their black-out period ahead of next week's policy decision, adding a layer of anticipation to market dynamics.
The US dollar exhibited no distinct trend following its earlier decline this week after President Trump's trade announcements were perceived as more favorable than initially feared. Traders remain vigilant as they navigate potential shifts in global trade dynamics.
Hungary's economic sentiment continues to grapple with challenges as the GKI indicator signals further deterioration in January. The indicator matched its lowest level since late 2022, indicating persistent economic concerns within the country.
Meanwhile, South Korea's year-on-year growth slowed from 1.5% to 1.2%, reflecting ongoing economic adjustments amidst global uncertainties. Despite this slowdown, projections for 2024 indicate an annual growth rate increase to 2%, up from 1.4% in 2023.