The US Dollar makes a turn, ending its recent downward trend. Traders are just starting to assess the damage from former President Donald Trump’s new weekend tariff announcements. DXYUSD Dollar Index is battling to recoup some ground. After a volatile start to Monday’s Asian trading session, it was able to recover and reclaim the 143.00 figure.
At the same time, another antipodean overachiever, the Australian Dollar, is taking big bullish steps, as the AUD/USD pair is enjoying trading positively above the 0.6300 area. The Aussie is off to a roaring start this week as bullish momentum extends. This positive trend persists despite continued pressure from the Japanese Yen. Yen performance has mostly been determined by expectations around the contrasting monetary policies of the Federal Reserve and Bank of Japan. This ongoing robust wide gap continues to weigh on the AUD/USD currency pair.
As of Monday trading, the USD/JPY is succeeding in halving its losses on the day, moving back above the 143.00 mark in doing so. This stabilizing movement is consistent with currency markets generally as investors are still adjusting to the new economic signals.
As market participants continue to react to news of Trump’s tariffs, worries over possible trade implications are hard to shake. The market is abuzz with speculation about how these tariffs will affect domestic and foreign trading alike. This has led to a risk off attitude amongst traders. The weakening of the US Dollar has stopped, indicating a temporary reprieve. Investors are skeptical today, but hoping for a clear path forward on fiscal/monetary policy mix and its economic multi-front impact.
On the one hand, Bitcoin is nearing good resistance ($85,000). The overall cryptocurrency market appears to be bullish as Bitcoin is reaching this important price milestone. A breakout above this level could indicate sustained upward momentum, attracting attention from traders and investors alike who are closely monitoring Bitcoin’s trajectory.
It is a challenging trading landscape, marked by the intertwining of macroeconomic conditions and geopolitical tensions impacting appreciated asset prices and currency pairs. Major central banks are pursuing divergently aligned monetary policies, with profound effects on market expectations. This divergence especially takes a toll on the value of the Japanese Yen against other currencies, such as the Australian Dollar.