ECB rate cut, US tariffs and BRICS

Frank Walbaum FX Strategies.Asia

Important News for the day

Fri, 31st, – CET DE German prelim CPI.
Fri, 31st, 14:30 CET CA Gross domestic product.
Fri, 31st, 14:30 CET US Core PCE price index.

US tariffs

President Trump will start implementing new tariffs over Canada and Mexico. Both are important trading partners for the US. Still the decision remains pending, whether oil imports will not be affected for both countries. Starting on Saturday other goods might face the aforementioned tariffs. On another note the President might also impose tariffs of 100% on BRICS countries should they continue their plans in implementing their own currency away from the Dollar.

Market talk

The Dollar shows signs of strength. Yesterday’s ECB interest rate decision has caused the EUR to lose further strength as the rate cut negatively impacts the common currency. The interest rate differential might also play a role where, which should further support the Greenback. Equity markets still remain well- bd and continue their path to the upside. Yet the sharp rise of the German DAX in January might be questionable. Will the market face a correction at some point here? In general oil is trading just at th 50- moving average based on the daily chart. The adjustment of the US policy might cause the market to weaken further. Precious metals look positive. Silver keeps trading above the USD 31.00 with further upside potential, whereas Gold has created a new all- time- high.

Tendencies in the markets

Equities positive, USD stronger, cryptos sideways, oil weaker, Silver positive, Gold positive, JPY stronger.

Author

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.