The US Dollar is showing signs of sustained weakness, against the backdrop of easing global trade war fears and potential diplomatic progress in the Russia-Ukraine conflict. Markets are closely watching the upcoming Russia-US meeting set for Tuesday, which aims to discuss the resolution of the ongoing conflict. Meanwhile, the Australian Dollar has regained momentum, climbing above 0.6350 in the Asian session on Monday, supported by improving risk sentiment.
In Japan, the preliminary GDP report has exceeded market expectations, recording a 0.7% quarter-on-quarter and 2.8% year-on-year expansion in the fourth quarter. This robust economic growth has fueled speculation that the Bank of Japan (BoJ) may hike interest rates again to maintain economic stability. The stronger-than-expected performance of the Japanese economy is a significant marker, reflecting resilience amid global uncertainties.
On the other side of the globe, President Trump has imposed new tariffs on several of America's trading partners, with expectations of additional tariffs and potential foreign retaliation in the coming quarters. These measures have stirred concerns over global trade dynamics, although recent developments suggest a potential easing of tensions.
As investors navigate these shifting economic landscapes, the gold market has responded positively, with prices rising to $2,900 in the Asian session on Monday. The improved risk sentiment among traders is further bolstered by the prospect of reduced geopolitical tensions and a more stable global trade environment. Moreover, Bitcoin appears to be consolidating within a range of $94,000 to $100,000 for nearly two weeks, reflecting a period of relative stability in the cryptocurrency market.
Market attention is also focused on the Reserve Bank of Australia's (RBA) interest rate decision expected on Tuesday. The decision could influence global currency markets and provide further insight into Australia's approach to addressing inflation and supporting economic growth.