Trump raised tariffs on steel and aluminium imports to 25% ‘without exceptions or exemptions’. They’ll take effect on March 4 (so, still time for him to change his mind).
The USD responded in a slow manner, rising over the course of the session, not by too much.
EUR, AUD, NZD, CAD, GBP, JPY and CHF are all lower.
The situation for the Australian dollar was confusing. Australian Prime Minister Albanese said Trump is considering an exemption for Australia. Minutes later we had Trump shouting ‘no exceptions or exemptions’. Minutes after that we had Trump conceding he was considering an exemption for Australia.
You’d think AUD would have swung around on all this headline ping-pong. It did, but in a small range only. Tiny really. As the session progressed and some risk was taken off the table the AUD slid a little further.
On the data front later we had an improvement for Australian business confidence, turning a little positive in January at +4, from -2 in December. Business conditions slipped from December (to +3 from +6).
Back to Trump’s tariffs, Canada’s industry minister said the tariffs are "totally unjustified”, that he is consulting with international partners on them, and that Canada's response will be "clear and calibrated." Canada is a major exporter of steel to the US.
Catherine Mann, a Bank of England Monetary Policy Committee member, was reported in the Financial Times as saying she sees firms struggling to increase prices now as consumers trim their spending, You’ll recall that at last week’s meeting the normally more hawkish Mann pivoted to a dovish dissent, wanting to cut the Bank rate by 50bp instead of the 25bp that was decided upon. Mann is speaking twice in the sessions to come today.
Gold hit a record high above USD2940, up over 1%. It then dropped back, shedding USD30 in rapid time. I didn’t see any news-type catalyst.
Trump warned that if Hamas does not release all Israeli hostages by midday Saturday, he will push to cancel the Israel-Hamas ceasefire and allow military action to resume. "If all of the hostages aren’t returned by Saturday at 12 o’clock, I’d say cancel it and all bets are off—let hell break out".
Gold:
This article was written by Eamonn Sheridan at www.forexlive.com. Read More Details
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