Foreign Exchange Market Update

July 14, 2025

United Kingdom (U.K.) Employers Reduce Hiring, Budget Constraints

British Pounds traded at 1.1687 against USD at 9:00 AM PST

U.K. companies reduced their hiring activity further in June. Permanent staff appointments declined at the fastest pace in nearly two years in June, and temp billings dropped the most since February. Companies pulled back on hiring due to reduced confidence and worries about costs. Meanwhile, the availability of staff increased amid reports of redundancies and a decline in demand for workers. The supply of permanent labor grew at a slightly faster rate than predicted for temporary candidates; in each case, the rate of growth was the sharpest registered since November 2020.

Total demand for workers continued to fall in June, reflecting a steeper reduction in permanent vacancies, as demand for short-term staff dropped at the slowest pace in ten months. Further, salaries and temp wages increased moderately, with rates of inflation notably weaker than their historical trends. 

Weak demand, tighter client budgets, and improvements in candidate supply weighed on pay growth. Starting salaries and temp wages increased moderately. Ongoing geopolitical turbulence and the threat of rising costs, alongside the promise of technology efficiencies, mean companies continue to wait and see with their hiring. 07/14/2025 - 06:14:00 (RTTNews)

China Exports Growth, Imports Rebound

China's exports grew in June on de-escalating trade tension with the U.S., and imports rebounded for the first time this year, signaling a positive contribution from net trade to economic growth in the second quarter. Exports increased 5.8% year-on-year in June and were stronger than the 4.8% increase in May. Imports rebounded 1.1% from a year ago, following the previous month's 3.4% decline. Consequently, the trade surplus rose to $114.7 billion from $103.2 billion in May. 

Due to the de-escalation of tariff tensions in May, exports to the U.S. declined at a slower pace in June. Exports to the U.S. fell 16.1% but at a slower rate than the 34.5% drop seen in May. Following the higher tariff policies of the U.S. administration early this year, Chinese exporters diversified their shipments to other Asian economies and the EU. Recently, there was a surge in imports from China, suggesting that supply chains are deeply intertwined. In the first half of the year, China's exports advanced 5.9%, while imports declined 3.9%. As a result, the trade surplus surged to $585.9 billion.

Last week, the U.S. President announced new tariffs on imports from most Asian economies are set to take effect from August 1. Further, Trump said goods transshipped to evade higher tariffs will be subject to that higher tariff. The U.S. imposed a 20% duty on goods from Vietnam and a sharper 40% tariff on goods transshipped from China through Vietnam.

In May, Washington and Beijing reached an agreement to suspend the majority of tariffs for 90 days and to roll back certain restrictive measures. The deadline for China to reach a trade deal ends on August 12. China is scheduled to release its second-quarter GDP data on July 15. Beijing aims to achieve around 5% economic growth this year.

China benefited from a wave of trade frontloading in the first half of the year. Even a low single-digit annual growth for exports will translate to a smaller drag on 2025 growth than what the market feared at the start of the year. 07/14/2025 - 04:10:00 (RTTNews)