Asia Summary and Highlights 27 Jan
US President Donald Trump said he will raise tariffs on South Korean goods to 25% from 15%
South Korea kneel immediately
Asia Session
U.S. President Donald Trump said he will raise tariffs on South Korean goods to 25% from 15% as South Korea has been slow in cementing the trade deal. South Korea reacted immediately by saying legislation to enact US investment commitments has now been introduced and will soon be reviewed. It will likely prevent more escalation from Trump. Gold and silver remain upbeat on Tuesday and is seeing both fast approaching Monday's high. AUD/USD is trading 0.11% lower at 0.6908 but has yet to fill the Monday opening gap. NZD/USD is also trading 0.07% lower while USD/CAD rises 0.2%.
Small rebound for USD/JPY on Tuesday. Earlier, we have Japan December Services PPI at 2.6% y/y, pointing towards persistent wage growth. While it aligns with BoJ's forecast, the headlock with political pressure will keep imminent hike out of the picture. USD/JPY is trading 0.19% higher at 154.42. Else, EUR/USD is down 0.05% and GBP/USD is up 0.02%.
European and North American sessions
The USD remained weak, having little direction in the European morning before losing ground early in North America. EUR/USD rise from around 1.1850 to see highs above 1.19 before a modest co0rrectin, while GBP/USD rose from a.3650 to see highs above 1.37. AUD/USD was slightly firmer but could not break resistance at .6942, while USD/JPY had little direction in a range centered around 154. USD/CAD did see modest gains, moving back above 1.37, with Trump threatening 100% tariffs on Canada.
US data was on the firm side of expectations, with November durable goods orders up 5.3% with a 0.5% gain ex transport, and January’s Dallas Fed manufacturing index significantly less negative at -1.2 from -11.3.