Forexlive Americas FX news wrap: Trump speaks at Davos, US stocks hit a record

• US initial jobless claims 223K vs 220K estimate
• Trump reiterates Feb 1 data for Canada and Mexico tariffs
• Trump: Zelensky told me he’s ready to make a deal
• Canada November retail sales 0.0% vs +0.2% expected
• EIA weekly US crude oil inventories -1017K vs -1645K
• Alcoa highlights resilient aluminum demand in a good sign for the global economy

Markets:

• Gold flat at $2753
• WTI crude oil down $1.18 to $74.26
• S&P 500 up 0.5%
• US 10-year yields up 4.5 bps to 4.64%
• JPY leads, USD lags

Trump continued to talk about tariffs on Wednesday in an appearance at Davos but the effect on the market was minimal. There was some initial US dollar buying but it quickly faded by around 50 pips in a move the other way.

Trump did rattle some other cages, particularly in oil where he caused for OPEC to increase production. That led to a $1.50 decline in oil prices from where they were trading beforehand. He made the call saying that it would drive Russia to make peace in Ukraine but let’s not forget that Russia is an integral part of OPEC+.

Late in the day, Trump also reiterated Mexico and Canada tariffs for Feb 1, though it only led to a 12 pip move in the loonie.

The crypto market was also bounced around as he signed an order regarding a committee to investigate a digital asset reserve but the reaction was mixed, in part because some of that was already priced in. There was also some regurgitation of a report from last week highlighting that a reserve could prioritize coins ‘founded in the USA’ rather than bitcoin.

Finally, power generation companies rallied once again as Trump once again talked about doubling US electrical capacity.

In FX, the overall moves were small with the largest one coming in the yen as traders de-risk ahead of the BOJ decision.

This article was written by Adam Button at www.forexlive.com.