Dollar Struggles on Trade Policy Ambiguity, Yen on Watch as USD/JPY Approaches 160
| Action Insight Daily Report 1-7-25 |
Dollar Struggles on Trade Policy Ambiguity, Yen on Watch as USD/JPY Approaches 160 |
Dollar remains under some pressure as markets digest conflicting signals about the trade policy direction of the incoming Trump administration. President-elect Donald Trump dismissed media reports suggesting a sector-specific tariff plan as "fake news" but provided no further clarification. The lack of concrete details leaves markets grappling with uncertainty, unable to assess the economic impact of the administration’s trade strategies. Despite the unease, the greenback's pullback has been contained, with market participants turning their attention back to critical economic data and events. Key releases this week include the ISM Services PMI later today, FOMC minutes on Wednesday, and Friday's non-farm payroll report. These events are expected to offer clarity on the Fed’s policy direction and provide a counterbalance to the prevailing trade-related uncertainties. Meanwhile, Dollar’s earlier gains against Yen in Asian session prompted a swift reaction from Japan. Finance Minister Katsunobu Kato issued a stern warning against "one-sided, sharp moves" in the foreign exchange market. Kato emphasized that the Japanese government is closely monitoring developments and is prepared to take "appropriate action" to address excessive currency fluctuations. As the comments triggered a modest recovery in Yen, speculation is mounting that Japan could intensify its vigilance if USD/JPY approaches the psychologically significant 160 level.... |
USD/JPY Daily Outlook Daily Pivots: (S1) 156.61; (P) 157.28; (R1) 158.33; More... Intraday bias in USD/JPY is back on the upside with breach of 158.06. Current rally from 139.57 is resuming to 61.8% projection of 139.57 to 156.74 from 148.64 at 159.25. Firm break there will target 161.94 high. However, break of 156.01 support will indicate short term topping, likely with bearish divergence condition. Intraday bias will then be back on the downside for 55 D EMA (now at 153.64) instead. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:50 | JPY | Monetary Base Y/Y Dec | -1.00% | -0.20% | -0.30% | | 00:30 | AUD | Building Permits M/M Nov | -3.60% | -1.00% | 4.20% | 5.20% | | 07:30 | CHF | CPI M/M Dec | -0.10% | -0.10% | -0.10% | | 07:30 | CHF | CPI Y/Y Dec | 0.60% | 0.60% | 0.70% | | 08:00 | CHF | Foreign Currency Reserves (CHF) Dec | 725B | | 09:30 | GBP | Construction PMI Dec | 54.5 | 55.2 | | 10:00 | EUR | Eurozone Unemployment Rate Nov | 6.40% | 6.30% | | 10:00 | EUR | Eurozone CPI Y/Y Dec P | 2.40% | 2.20% | | 10:00 | EUR | Eurozone CPI Core Y/Y Dec P | 2.70% | 2.70% | | 13:30 | USD | Trade Balance (USD) Nov | -78.4B | -73.8B | | 13:30 | CAD | Trade Balance (CAD) Nov | 0.8B | -0.9B | | 15:00 | USD | ISM Services PMI Dec | 53.5 | 52.1 | | 15:00 | CAD | Ivey PMI Dec | 55.4 | 52.3 |
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