|

Forex today: USD/JPY falls on Trump's trade comments, DXY holds up

  • USD/JPY lower on Trump and a drop in US stocks.
  • Dollar maintains form towards 98 handle.

Forex today was slightly active following a long weekend, with the dollar picking up a bid and then markets taking heed of Trump's comments with respect to trade with China. 

Trump, who was speaking at a joint news conference Monday in Tokyo with Japanese Prime Minister Shinzo Abe, said the U.S. wasn't ready to make a trade deal with China. “They (China) would like to make a deal. We’re not ready to make a deal,” Trump said, according to Bloomberg. He added that tariffs on Chinese products could go up “very substantially.”

This had an adverse effect on stocks withtThe Dow Jones Industrial Average DJIA, -0.93%  shedding 237.92 points, or 0.9%, to 25,347.77, while the S&P 500 index SPX, -0.84%  fell 23.67 points, or 0.8%, to 2,802.39. The Nasdaq Composite Index COMP, -0.39%  dropped 29.66 points, or 0.4%, to 7,607.35.

US data was hardly a reprieve from the string of disappointments of late but the Conference Board consumer confidence survey saw a strong improvement in May to 134.1, a six month high. However, the Dallas Fed manufacturing survey dropped to  -5.3 in May from +2. 

As for US 10 year treasury yields, they dropped from 2.32% to 2.26% - the lowest since Sep 2017. The 2 year yields fell from 2.17% to 2.12%. The chance of a Fed rate cut by December, implied by Fed fund futures, increased from 130% to 140%.

As for currency price action, analysts at Westpac summed up the moves as follows:

  • EUR/USD chopped down from 1.1195 to 1.1160 as European leaders squabbled over the implications of the elections and what they mean for key roles such as EU and ECB president. USD/JPY was lower overall but only about -15 pips on the day at 109.35, the yen not finding as much safe-haven demand as might have been expected.
  • AUD/USD was resilient, given the stronger USD, ranging between 0.6915 and 0.6935. 
  • NZD fell from 0.6560 to 0.6540. 
  • AUD/NZD rose from 1.0555 to 1.0587.

Key notes from Wall Street:

Key events ahead:

Governor and Deputy Governor are in Parliament which includes Q&A and comments will be rolling through:

So far, some comments have come in slightly earlier than expected as follows:

  • RBNZ dep gov Bascand: rate cut still working its way through.
  • Orr: we are open-minded on changing proposed bank capital requirements but want more capital.

Elsewhere, the New Zealand ANZ business confidence survey (May data due 11am Syd/9am Sing/HK) is on the cards. "The Apr confidence index was -37.5, above the Aug 2018 low of -50 but still very weak after sliding from around +20 before the 2017 election. The activity outlook was +7 in Apr," analysts at Westpac explained.

Author

Ross J Burland

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

More from Ross J Burland
Share:

Editor's Picks

GBP/USD nudges higher above 1.3350 despite Middle East turmoil

The GBP/USD pair rebounds to near 1.3385 during the Asian trading hours on Thursday. However, the potential upside for the major pair might be limited amid cooler-than-expected UK inflation data and escalating tensions in the Middle East. Traders will take more cues from the UK Retail Sales report, which is due later on Friday. 


EUR/USD advances ahead of ECB policy decision

EUR/USD extends its gains for the second consecutive day, trading around 1.1410 during the Asian hours on Thursday. The pair gains ground as the Euro finds solid support ahead of the European Central Bank's upcoming interest rate decision.

Gold extends range play above $4,100 as inflation fears lift Fed hike bets and cap gains

Gold consolidates above the $4,100 round figure through the Asian session, and seems to have stalled its modest pullback from an over two-week high touched the previous day. Crude oil prices climb to a fresh high since June 11 amid a further escalation of tensions between the US and Iran, fueling inflation fears and bolstering US Fed interest rate hike expectations.

Hyperliquid, Robinhood could lead crypto’s next bull market as DeFi and TradFi converge

The next crypto bull market could be driven by the growing convergence between blockchain-based financial infrastructure and traditional finance, according to Bitwise CIO Matt Hougan. In a report published late Tuesday, Hougan argued that crypto may be showing early signs of a market bottom, with Bitcoin gaining 9% since July 1 even as the NASDAQ 100 declined 6%.

Ripple and Stellar await direction amid cautious sentiment

Ripple and Stellar trade cautiously as both tokens hover around key technical levels. XRP is testing resistance at its 50-day EMA, while XLM continues to consolidate around the $0.187 support zone. Meanwhile, mixed derivatives data with a slight bearish tilt suggests traders remain cautious, keeping the next directional move uncertain.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?
The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.