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.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content

Recommended content

Editors’ Picks

EUR/USD slides to multi-month lows below 1.0650

EUR/USD slides to multi-month lows below 1.0650

EUR/USD stays under heavy bearish pressure and trades at its lowest level since November below 1.0650. Divergent ECB-Fed policy outlooks and the risk-averse market atmosphere keep the US Dollar strongly bid and weigh on the pair.


GBP/USD extends decline below 1.2450 on sustained USD strength

GBP/USD extends decline below 1.2450 on sustained USD strength

GBP/USD extends losses and trades at fresh multi-month lows below 1.2450 even after the January month UK GDP was revised higher to 0.3%. The negative shift seen in risk mood fuels another leg higher in the USD and drags the pair lower.


Gold advances to new historic high above $2,400

Gold advances to new historic high above $2,400

Gold gathers bullish momentum ahead of the weekend and trades at a new record high above $2,400. Escalating geopolitical tensions help XAU/USD continue to push up despite the broad-based US Dollar strength.

Gold News

Robert Kiyosaki steers clear from ETFs, opts for holding Bitcoin directly instead

Robert Kiyosaki steers clear from ETFs, opts for holding Bitcoin directly instead

Rich Dad Poor Dad author Robert Kiyosaki says he will not buy Bitcoin ETFs. Kiyosaki stated his dislike for Wall Street’s financial products and preferred packaging his own. 

Read more

Five fundamentals for the week ahead: Israel-Iran tensions, US Retail Sales, and more Premium

Five fundamentals for the week ahead: Israel-Iran tensions, US Retail Sales, and more

US Retail Sales data will provide an updated snapshot of the health of the economy. Chinese GDP may confirm the narrative that Beijing's stimulus is working. UK inflation data may push the Bank of England to early rate cuts.

Read more