Breaking: Trump to respond to China’s tariffs this afternoon, USD/JPY slumps below 106

Eren Sengezer FXStreet

Responding to China's announcement of tariffs on $75 billion worth of American imports as retaliation, US President Trump said they don't need China and added that the US would be better off without China. "I will be responding to China’s Tariffs this afternoon. This is a great opportunity for the United States," Trump tweeted out.

With the initial market reaction, the US Dollar Index dropped below the 98 mark and the 10-year US Treasury bond yield extended its losses. While the 10-year yield is erasing nearly 3%, the risk-off mood weighs on the USD/JPY pair as well, which was last down 0.65% on the day at 105.73. Below is President Trump's Twitter threa.

"Our country has lost, stupidly, trillions of dollars with China over many years. They have stolen our Intellectual Property at a rate of hundreds of billions of dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far better off without them.

The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must stop. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies home and making your products in the USA.

I will be responding to China’s Tariffs this afternoon. This is a great opportunity for the United States. Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to search for & refuse all deliveries of Fentanyl from China (or anywhere else!). Fentanyl kills 100,000 Americans a year. President Xi said this would stop - it didn’t. Our economy, because of our gains in the last 2 1/2 years, is much larger than that of China. We will keep it that way!"

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

GBP/USD dips below 1.3350 with bullish momentum losing steam

The British Pound ticks lower against the US Dollar Monday, attempting to close a seven-day rally, as tensions rise again in the Strait of Hormuz, one of the critical points in the peace process between Washington and Tehran. The GBP/USD pair trades near 1.3340 at the time of writing, down from 1.3387 highs last week, although it maintains a near-term bullish trend intact.

EUR/USD clings to daily gains, still below 1.1450

EUR/USD manages to shrug off the initial bearish tone and advances toward the 1.1440-1.1450 band on Monday, up modestly for the day. Meanwhile, the pair’s mild gains comes on the back of the lack of clear direction in the Greenback in quite an apathetic start to the week.

Gold remains offered below $4,200

Gold comes under fresh downside pressure on Monday, reversing three daily upticks in a row and meeting some initial resistance around the $4,200 mark per troy ounce. Safe-haven demand has shifted toward the US Dollar as renewed tensions surrounding the Strait of Hormuz weigh on market sentiment, limiting the precious metal's upside.

XRP extends decline as risk-off sentiment, fading retail demand weigh

Ripple (XRP) sustains losses on Monday, edging lower toward the short-term $1.10 support. XRP failed to sustain momentum above $1.20 on the previous day, prompting profit-taking amid a broader crypto market drawdown attributed to mild inflows into related digital investment products, declining retail participation and macroeconomic uncertainty.

The US Dollar just beat the Swiss Franc at its own safe-haven game

As the king among safe havens, the Swiss Franc is supposed to benefit from geopolitical shocks such as the Iran war. This time, it didn’t. The Swissie is nearly 6% below January’s peak against the USD after a sharp decline that came along with the war in Iran and the closure of the Strait of Hormuz.

Kevin Warsh offers no policy clues: Why markets still got their answer

Financial markets came to Sintra looking for clues about the Federal Reserve's (Fed) next move. They largely left with confirmation that Fed Chair Kevin Warsh intends to make those clues much harder to find.