China to harm the US economy? Geopolitical tensions rise

Frank Walbaum FX Strategies.Asia

Important News for the day

16th, 08:00 CET UK Consumer price index.
16th, 15:45 CET CA BoC interest rate decision.
16th, 19:30 CET US Fed chair Powell speech.

Tariffs out of control?

Financial markets seem to respond on the rising tensions in the tariffs war. After China had stated they would not give it but also raise tariffs on products imported from the US, we can observe now that equities seem to negatively respond. The government in Beijing had pointed out that no new jets by manufacturer Boeing should be accepted further. Falling prices might hence be the result for now. Meanwhile after the recent push higher in oil the technical support zone still seems to be intact. If the USD 60.00 price level won’t break upside momentum might still continue.

Market talk

Today traders will follow the interest rate decision from Canada. Yesterday’s CPI data confirmed that inflation data especially on the monthly basis had come down again to 0.3%, which was way lower than the expectation. The CAD on the other hand lost some steam but still remains strong. A potential entry in the EURCAD and USDCAD might be found depending on the result of the interest rate decision today.

Tendencies in the markets

Equities sideways, USD weak, cryptos positive, oil sideways, Silver positive, Gold strong, JPY weak.

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.