Over the weekend, Trump upended trade relations yet again by threatening escalating tariffs on European countries that oppose his project to acquire Greenland. This time, the initial market reaction seems to be buying the dollar rather than selling it, though as this is written moves in early Asian Monday trading are modest. Beyond geopolitical worries, economic data continues to point to solid growth across the US, the UK and the Eurozone and risk assets remain well bid worldwide.
Enrique Díaz-Álvarez, Chief Economist at Ebury said: “The economic calendar this week features UK labor data on Tuesday, inflation data on Wednesday, followed by worldwide PMI indices of business activity. There will be few monetary policy announcements of note. Markets will remain focused on headlines about the latest flare up of the trade war across the Atlantic, specifically on the European reaction. We will be specially attuned to any signs that the Sell America trade from last April is back on.”
GBP:
November GDP and industrial production data surprised meaningfully to the upside, as markets continue to push back the timing and extent of Bank of England rate cuts. This week’s labor data takes on added importance to confirm the sharp slowdown in job creation seen over the last few months. December change in payrolled employees will be our focus. An expected bounce back in UK inflation the following day should validate the MPC’s cautious approach to further monetary easing.
EUR:
Eurozone industrial production rose healthily in November, surprising to the upside and confirming that we are seeing the early impact of the mammoth German fiscal stimulus package. Accordingly, we would not be surprised to see a positive surprise when January’s PMIs indices of business activity are released Friday, even though the consensus expectations are already quite rosy. The Euro should react positively to any such surprise, although geopolitical worries regarding Greenland and tariffs will probably be a stronger factor than macroeconomic data for now.
USD:
The US dollar is proving resilience to concerns over institutional degradation in the US, and the news on Trump’s criminal investigation of Chair Powell have had so far little impact on the greenback. Firm macroeconomic data and strong equity performance have so far kept the dollar high. This week, the PCE inflation report for December stands out. However, renewed uncertainty over trade policy will probably be a critical factor in the near term. Markets have not yet reacted to this new bout of policy volatility by selling the dollar as they did back in April, but that could turn on a dime.
About Ebury:
Ebury is the leading payments specialist that helps small- and medium-sized businesses (SMEs) operate and grow internationally. It is a global fintech company with a comprehensive and tailored offering to enable businesses to make and receive cross-border payments, open currency accounts, and manage currency risk.
Founded in 2009 by Juan Lobato and Salvador Garcia in London, Ebury now has over 1,800 employees serving more than 21,000 customers across 40 offices in 29 markets. We have capabilities in 130+ currencies. Ebury has grown rapidly and profitably in recent years.
In FY 2025, revenues rose to £286.5 million, and EBITDA grew to £44.9 million. It is regulated by the Dubai Financial Services Authority (DFSA) in the UAE and backed by top-tier investors, including Banco Santander, who have a majority share ownership.
