Asia Summary and Highlights 20 January
All eyes on Trump (Tariff)
Asia Session
The early spike in USD/JPY is faded by hope on a BoJ hike this week and the latest Trump remark does not seem too out of line from expectation. The USD is broadly lower even on a U.S. holiday after Trump's inauguration. And is supporting the JPY to see USD/JPY down 0.24% to 155.87 after an early spike to 156.57.
Regional equities are outperforming U.S. equities on Monday as market participants are bracing themselves from Trump's executive orders, which are expected to be signed once he is officially in office in a few hours. So far we are not seeing any out of line headlines from Trump but it is inevitable certain policies will be controversial and have a significant impact on the global economy (tariffs). AUD/USD is trading 0.34% higher with solid regional sentiment and soft USD, NZD/USD is outperforming with 0.5% gains at 0.5610 while USD/CAD slipped 0.22%. Else, EUR/USD is up 0.35% and GBP/USD is up 0.3%.
North American session
US data was stronger than expected, a 15.9% rise in housing starts to 1499k, and a 0.9% rise in industrial production, which contributed to a positive USD tone early on. However, the USD gains were reversed and more after Trump stated he had had a good phone conversation with Chinese President Xi. Into the afternoon, the USD regained a positive tone.
USD/JPY rose to 156.15 from 155.60. EUR/USD saw only modest losses, to 1.0275 from 1.03. EUR/GBP sustained European gains and EUR/CHF moved above .94. USD/CAD was particularly strong, rising to 1.4465 from 1.4410. With AUD/USD little changed near .62 AUD/CAD advanced to .8965.