January 28, 2025 at 03:51AM
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It
was another day of tariff talk from Trump, and also from his
Treasury Secretary Scott Bessant.
Bessant
kicked it off with a ‘moderate’ proposal to set a universal tariff at
2.5% with a gradual rise of 2.5% each month. Bessent said the
universal tariff could rise as high as 20%. Bessant’s comments were
from an unnamed source cited by the Financial Times.
The
USD began to rise, and soon after Trump weighed in, promising tariffs
on computer chips in the near future, on producers of
pharmaceuticals, will look at steel and other industries for tariffs,
and also tariffs on aluminum and copper.
The
USD gained further. Major FX lost ground broadly: EUR, AUD, GBP,
NZD, CAD.
There
was some stabilisation and a small bounce for non-USD FX before Trump
spoke again saying he wanted tariffs much higher than 2.5%, opposing
Bessent.
The
USD found renewed strength.
USD/JPY
has been a bit of an exception, while many of the major non-USD
currencies stabilised the yen lost further ground pretty much for the
entire session. Lows were around 154.50 and as I update its pressing
towards 155.70.
On
the data agenda today we had services PPI from Japan (for December
2024) coming in slightly lower than November but still at a solid
2.9% y/y rise.
From
Australia, we had a marginal improvement for business confidence but
a better improvement for business conditions (December 2024 data
also).
Australia
will be a focus tomorrow with the official Q4 CPI result (preview in
the points above).
China
began its Lunar New Year holidays today (January 28 – February 4).
Singapore and Hong Kong will be out Wednesday and Thursday and
Wednesday, Thursday and Friday respectively.
This article was written by Eamonn Sheridan at www.forexlive.com.
