President Donald Trump has decided to postpone the implementation of the 25% tariffs on Canada and Mexico for one month. This decision follows discussions with his Canadian and Mexican counterparts on Monday. The announcement comes amid a backdrop of fluctuating global markets, as traders assess various economic indicators.
In Wednesday's Asian trading, the AUD/USD pair is hovering near 0.6250. Meanwhile, the Japanese Yen finds support from growth in Japanese real wages recorded in December. The Bank of Japan (BoJ) is anticipated to raise interest rates further, contributing to the Yen's strength. In contrast, the US Dollar is showing widespread softness, compounded by a recent sell-off in US Treasury yields.
The Chinese Yuan is experiencing a decline, driven by a disappointing Caixin Services PMI report. This development adds to the ongoing US-China trade war concerns that continue to unsettle global markets. As a result, the USD/JPY pair is on a downward trend and may test the 153.00 level in Asian trading.
Cryptocurrencies such as Bitcoin, Ethereum, and Ripple are maintaining positions around critical levels, indicating cautious market sentiment. Meanwhile, gold prices are sustaining a record-setting rally, trading near $2,850. Investors remain vigilant, awaiting key US private sector employment data and further developments in US-China trade negotiations, which could influence gold price movements.
The market's attention is also focused on the policy divergence between the Reserve Bank of Australia (RBA) and the Federal Reserve (Fed). This divergence is contributing to volatility in currency markets as traders navigate the complex landscape.