ForexLive Asia-Pacific FX news wrap: USD weaker session – no tariff news is good news

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News
crossed early via a Wall Street Journal report that while Trump was
planning a number of executive orders within hours of being sworn in
as President on Monday, US time (he is being sworn in at noon US
Eastern time) he would not be issuing orders on tariffs. The Journal
reported this on the basis of unnamed sources briefed on a call from
Stephen Miller, Trump’s incoming White House deputy chief of staff
for policy. Over
the session here ‘risk’ FX moved higher against the USD. Whether
the report turns out to be correct is the next question. If not it’ll
set up a retrace higher for USD. A sharp one I’d suggest. Something
to eye in the hours ahead.

Other
news revolved around the People’s Bank of China leaving China’s
benchmark lending rates unchanged at the monthly fixing on Monday. A
weakening yuan has limited PBoC monetary easing options a little. The
one-year loan prime rate (LPR) was kept at 3.1%, while the five-year
LPR was unchanged at 3.6%. Most new and outstanding loans in China
are based on the one-year LPR, while the five-year rate influences
the pricing of mortgages.

There
was little yen-related news but JPY took a big stick to the weaker USD with
gusto. USD/JPY popped initially to highs above 156.50 but fell back
to lows under 155.75 at one stage.

Back
to Trump’s executive orders. Later news focused on Trump poised to
invoke emergency powers as part of his plan to unleash domestic
energy production (see bullets above).

Note
that Monday is a US market holiday. I’ve posted a run down on
market closures (some futures markets are opened for some trading on
Monday):

• Reminder – US markets are closed on Monday, January 20, 2025

USD/JPY update:

This article was written by Eamonn Sheridan at www.forexlive.com.